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Commission of inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme Report of Commissioner, the Hon TRH Cole, AO, RFD, QC Volume 5 Appendices


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COMMISSIONER THE HONOURABLE T P R P N rp QM r oi P AO R Pn nr

VOLUME 5

Report of the Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme

Volume 5

Appendices

Commissioner

The Honourable Terence RH Cole AO RFD QC

November 2006

© Commonwealth of Australia 2006

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Attorney General's Department, Robert Garran

Offices, National Circuit, Barton ACT 2600 or posted at http:/ /www.ag.gov.au/cca

Report of the hiquiry into certain Australian companies in relation to the UN Oil-for-Food Programme

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Contents

Appendix 1 Joint opinion of Dr Renwick and Dr Ward, 9 December 2005 1

Appendix 2 Consolidated Letters Patent 13

Appendix 3 Letters to the Attorney-General 17

Appendix 4 Law enforcement access to IIC materials: procedures,

November 2005 35

Appendix 5 Correspondence with the United Nations 37

Appendix 6 Memorandum of understanding between AUSTRAC and the

Inquiry, January 2006 51

Appendix 7 Sitting days and witnesses called 61

Appendix 8 Practice Note 1, 8 December 2005 65

Appendix 9 Commissioner's reasons 71

Appendix 10 Administration of the Inquiry 125

Appendix 11 AWB Limited and AWB (International) Limited: structure 137

Appendix 12 Extract from IIC final report 155

Appendix 13 Inland transportation fees 157

Appendix 14 AWB Limited: contracts, July 1999 to December 2002 165

Appendix 15 Contracts submitted to OF AT and permissions to export 167

Appendix 16 Mr Emons and Mr Watson: emails and file note, June to July 2000 175

Appendix 17 Inland transportation fees, November 1999 to September 2000 185

i V Report of the Oil-for-Food Inquiri/

Appendi x 1 8 M r Stott' s knowledg e o f inlan d trucking , lat e 200 0 an d earl y

200 1 19 7

Appendi x 1 9 Ira q updates , Octobe r 200 0 21 1

Appendi x 2 0 Correspondenc e betwee n AW B Limite d an d DFAT , Octobe r

an d Novembe r 200 0 21 5

Appendi x 2 1 Extract s o f note s o f M r Snowbal l an d M r Hoga n 22 3

Appendi x 2 2 Correspondenc e betwee n M r Lindberg , Prim e Ministe r

Howar d an d M r Saleh , Jul y 200 2 22 5

Appendi x 2 3 Inlan d transportatio n fees , 199 9 t o 200 3 23 1

Appendi x 2 4 Analysi s o f Alia' s ban k statement s 24 1

Appendi x 2 5 Iraq' s applicatio n o f fund s receive d fro m Ali a 27 3

Appendi x 2 6 Outlin e o f potentiall y relevan t offence s 31 3

Appendi x 2 7 Commonwealt h Minister s an d officers : statutor y declaration s 39 9

Appendi x 2 8 AW B contract s 40 5

i V Report of the Oil-for-Food Inquiri/

Volume 1 Summary, recommendations and background

Summary

Findings

Recommendations

1 United Nations resolutions restricting trade with Iraq

2 Australian enforcement of United Nations resolutions

3 Imposition of inland transportation fees and after-sales-service fees: Iraq documentation

4 United Nations knowledge of breaches of sanctions: 1999 to 2003

5 United Nations investigation into the Oil-for-Food Programme

6 The Letters Patent

7 Conduct of the Inquiry: principles and procedures

8 AWB's approach to investigation and disclosure

Volume 2 Negotiations and sales

July 1999 - December 2000

9 AWB Limited and the AWB group of companies

10 AWB's sales to Iraq before July 1999

11 AWB's participation in the Oil-for-Food Programme

12 The role of the Department of Foreign Affairs and Trade

13 July to December 1999: Iraq introduces an inland transportation fee

14 October 1999: further sales of wheat to Iraq

15 January 2000: a deletion to the AWB short-form contract

16 January to March 2000: the Canadian complaint

17 April to July 2000: delays and demurrage

18 April to July 2000: changes within International Sales and Marketing

19 October 2000: a visit to Iraq and subsequent events

20 October 2000: an 'eloquent solution'

21 November 2000: introduction of the 10 per cent after-sales-service fee

22 December 2000: the Arthur Andersen report

i V Report of the Oil-for-Food Inquiri/

Volume 3 Sales, allegations and inquiries January 2001 - December 2005

23 January 2001 to June 2002: more sales to Iraq

24 June 2002 to March 2003: contracts A1670 and A1680

25 March to September 2003: renegotiation of AWB contracts

26 August 2000 to March 2003: inland transportation fees

27 BHPP, the Iron Filings Claim, and Tigris

28 May 2003 to December 2005: allegations and inquiries

Volume 4 Findings

29 The Wheat Export Authority

30 The knowledge of the Commonwealth

31 Findings: AWB and associated persons

32 Findings: Alkaloids of Australia Pty Ltd

33 Findings: Rhine Ruhr Pty Ltd

i V Report of the Oil-for-Food Inquiri/

Appendix 1 Joint opinion of Dr Renwick

and Dr Ward^ 9 December

2005

I lllilNlllllllllilll EXH.0001.D015

IN T HE M A T T ER OF T HE I N Q U I RY I N TO

C E R T A IN A U S T R A L I AN C O M P A N I ES IN R E L A T I ON TO U N I T ED N A T I O NS

O IL F OR F O OD P R O G R A M ME

J O I NT O P I N I ON

9 D E C E M B ER 2005

M R. G L E NN O W B R I D GE

S O L I C I T OR A S S I S T I NG C O M M I S S I ON OF I N Q U I RY

C/- O F F I CE OF T HE A U S T R A L I AN G O V E R N M E NT S O L I C I T OR

DX 444 S Y D N EY

DR J A M ES R E N W I CK

BARRISTER

LEVEL 12, SELBOURNE CHAMBEKS

174 I'HILI,IP STREET

SYDMEY

N SW

2000 TEL: 02 9 2 32 8545

FAX: 02 9 2 23 3710

D R. C H R I S T O P H ER W A RD

B A R R I S T ER

LEVEL 5 WENTVVORI H CHAMBERS

180 PHILLIP STREE

S Y D N EY

N SW

2000

TEL: 02 9223 7944

FAX: 02 9232 8995

Report of the Oil-for- Food Inquiry 8

I'III''HMJ1IHIIII EXH.0001.0016

JOINT OPINION

Summary of Opimon

In our opinion:

Question 1: What is the status of United Nations Security Council Resolutions

under Australian domestic law?

Answer 1: Unless implemented by Australian legislation they have no direct

effect in Australian domestic law,

Question 2: Do United Nations Security Council Resolutions impose civil or

criminal responsibilities upon Australian corporations or citizens

under Australian domestic law?

Answer 1: Unless directly or indirectly incorporated by legislation into Australian domestic law, no.

Question 3: Were Security Council Resolutions 661 and 986 incorporated into

Australian domestic law in terms? If so, by what mechanism did this

occur?

A n s w er 3; Security Council Resolutions 661 and 986 were not in terms

incorporated into Australian domestic law, but domestic effect was

given to those Resolutions in the manner discussed in our answer to

Question 4.

Question 4: By what legal mechanisms did Australia enforce or support the United

Nations Security Council sanctions prohibiting trade, except trade for humanitarian purposes, with Iraq.

A n s w er 4: By Customs (Prohibited Imports) Regulation 13CA, Customs

(Prohibited Exports) Regulations 4 MA and 4QA, Air Navigation

Regulation 119 (formerly 311D), certain exemptions granted under

Banking (Foreign Exchange) Regulation 39, and by the Migration (Iraq-United Nations Security Council Resolutions) Regulations 1994. The

relevant exemption under the Banking Regulations was revoked by

instrument in May 2D03, and the remaining regulations were repealed

by the Iraq (Reconstruction and Repeal of Sanctions) Regulations 2003, so that all of these measures ceased to operate on 29 May 2003.

O ur Instructions

Our instructing solintor, Mr. Glenn Owbridge, is the pnncipal solicitor assisting

the Honourable T R H Cole AO, RFD, QC. Mr. Cole was appointed by the

Governor-General on 10 November 2005 to inquire into and report upon:

i V Report of the Oil-for-Food Inquiri/

iiiiMwiniitu EXH.0001.0017

(ii) wlielhci nny (hri-imu, iiclran, ccrndnd, }m\fmeiit of wntmf; of am/ of iltc Ihrcv

AnslTntinii coinimnicf inenlionai iii the final n'parl ("aiaininiliilii'ii vf lliv

Oil - for - Food Pivgrivrime b}/ Ihe Iraqi rigiinc") of the IndepmdciU biqiiin/

Coninnttee into the Uiutect hJatwns Oil - for - Food - Progrnmnw, or nn>/

person nssncwlrd will: one of those coinp/inies, nnglil have conslitiited n

breach of any law ofthr CominonuKiilth, il State oi Territory; and

(h) if so, whether the ijiteslion of criniinal or other legal proceedings should he

referred to the reievmit Comnwiiwenllh, Stale or Territory agency.

2. We are instructed that it may be important for the Commission to determine the

status of United Nations resolutions and sanctions under Australian domestic

law. Accordingly, we are asked the questions which we have set out in the

summary above. We now provide reasons for our answers, which arc also set

out in that summary.

UN Security Council & its Resolutions

3. The United Nations was established by the Charter of the United Nations in

1945. A Security Council was established under the Charter and given certain

powers under Chapter VII. Those powers included the power to determine the

existence of threats to international peace and .security (Article 39), the power to

require member states to apply certain non-military measures to give effect to its

decisions (Arts 40 & 41), and the power to enforce its decisions by the use of

military force (Art 42).

4. By Article 25 of the Charter all member states of the United Nations agreed "to

accept and carry out the decisions of the Security Council in accordance Ji'ith the present

Charler"^

5. The charter was signed bv Australia in 1945 and it entered into force for

Australia on 1 November 1945. The Charter of the United Nations Act 1945 (Cth)

by s 3 provides that the Charter of the United Nations "is approved". For the

reasons that we give below^ that provision does not constitute a domestic

implementation of the Charter.

i V Report of the Oil-for-Food Inquiri/

I lll̸¸llllilllill EXH.0001.0018

In August 199‹, Iraqi mitilary forces invaded Kuwait. The Security Council

determined on 2 August by Kesolution 660 that there was n consequenhal breach

of international peace and security. On 6 Augu.st 1990, under Resolution 661,

reaffirming Resolution 660, and acting explicitly under Chapter 1 of the Charter,

the Council decided:

"3. Thai alt finta slinU pm'cul:

(a) the import luto their tnriivriii of all rcviinoditii^f, and products

origtnnliiig in °rnq or Kjiwail exported than'.frnm nftcr the dnte of the

present resoUitwu:

(h) (7111/ activities by their iintionnh or in their territoriei which wojilil

pi omote or m e calculated to promote the export or tram-shipinent of any

amimodities or producÌs from Irnq or Kiiwnit; mid iiny dealings by their

nationals or their flag iiessels or in their territories in any commodities or

products originating in Irncj or Kuwait and exported thercfrow after the

date of the present resolution, including in particular any transfer of

funds to Iraq or Kuwait for the purposes cf such activities or dealings;

(c) the sole or fiipply by ihcir nationals or from their territories or using

their flag vessels of any commodities or products, including weapons or

any other military ecjuipment, whether or not originating in their

territories hut not including supplies intended ftrictly for medical

purposes, and, in htimanitnrian circumstances, food stuffs to am/ person

or body in Iraij or Kuwait or to any person or body for the purposes of

any business carried on in or operated from Iraq or Kunmit, and any

itclizrilies by their nationah or in their territories which are calculated to

promote such sale and supply of such commodities or products.

4- ...that all states shall not make auailnble to the government of Iraq, or to

any commercial, industrial or public utility undertaking in Iraq or Kuwait, any

funds or any other financial economic resources and shall prevent their

nationals and any persons within their territories from removing from their

territories or otherwise making available to that government or to ant/ such

undertaking any such funds or resources and from remilting any other funds to

persons or bodies within Iraq or Kuwait, except payments exclusively for

Report of the Oil-for- Food Inquiry 11

EXH.0001.0019

10.

11.

stricllii iiicdiceil or huuiauHmian piirposos niiil, in ÃiiimnÏnlaritÏii orcumslimre^.

foodsiiiffs. "

Following military operations authorised by the Security Council, Iraqi military

forces were removed froni Kuwait. Sanctions were imposed u p on Iraq which

remained in place for a considerable period of time.

On 14 Apri! 1995, by Re.soluhon 986, the Security Council, resolved as follows:

Concerned hy the serimiH nutritional and health situation of the Iraqi popidiitwn.

mid hy the risk of a further deterioraiwn in this situation,

" Coiwinced of the need as a temporary measure to provide for the hiiinanitnrian

needs of the Iraqi people until the fulfihnenl by Ivnq of the relevant Security

Council resohilions, including notably Resolution 687 ..., alloics the Council to

lake further action with regard to the prohibitions referred to in Resolulion 661 of

6 August 1990, ill accordance with the prolusions of those resohilinns...,"

the Security Council then acted under Chapter 7 of the Charter of the United

Nations to authorise States, notwithstanding paragraphs 3(a) and (b) and 4 of

Resolution 661, to permit the import of oil originating in Iraq, essentially upon

the basis that the purchase price of the Iraqi oil would be placed directly into an

escrow account established by the Secretary-General, with the f u n ds in the

escrow account to be used to meet the h u m a n i t a r i an n e e ds of the Iraqi

population, and requesting the Secretary-General to use the funds in the escrow

account to finance the export to Iraq "in accordance with Ihe procedures of the

Commiltee established by Resolution 661 (1990) of medicine, heailh supplies, foodstuffs

and mnlerials and supplies for essential civilian needs, " on certain conditions."'

In September 2005, the Final Report of the Independent Inquiry Coinmittee into

the United Nations Food-for-Oil Programme' concluded that there had been

certain breaches of Secunty Council Resolutions 661 and 986.

On 10 November 2005, the Commission of Inquiry was established.

We now turn to the questions for advice.

Para 8(a).

hllp://wwvK' iic-offp org/

i V Report of the Oil-for-Food Inquiri/

WIIIIIIHIillHiHIl EXH.0001.0020

Question 1:-What is the status of the United Nations Security Council Resolutions

under Australian Uoiiicstic Law ?

Question 2:- Do United Nations Security Council Resolutions impose civil or criminal

responsibilities upon Australian corporations or citizens under Australian Domestic

Law? If so, by what mechanism?

11. In Slate ofVjclnna v Coiuinomiwaltb of Australia (1996) 187 CLR 416, five lustices of

the Hish Court' said at 181:

" ...as matters stand in Australia, and as they stood in 1900, the eonduet of external affairs by the Executive may produce agreements Ttfhrcli the Execiitizfc laishes to translate into the domestic or municipal legal order. I'o do so, it must procure the passage of legislation implementing those agreements if it -wishes to create indnndual

rights and obligations or change existing rights and obligations under that legal order".

12. That still states the law." The position is the same with UN Security Council

resolutions. The leading case on this question remains the deci.sion of the High

Court of Australia in Bradley v Commonwealth of Australia (1973) 128 CLR 557. That

case concerned action by the Australian Government seeking to implement a

resolution by the Security Council in 1973 that all member States completely

interrupt communications with the Rhodesian government. Consequently the

Postmaster-General of the Commonwealth disconnected Mr. Bradley's telephone

(he was the representative of the Rhodesian Department of Information) and

prevented him from using the post or telegrams. He commenced proceedings in

the original jurisdiction of the High Court seeking a declaration that the actions of

the Postmaster-General were beyond power and therefore invalid and seeking

orders reconnecting his telephone services and re-establishing his mail

entitlements. He was succcssful.

13. At the hearing of the suit the Commonwealth argued that it was relevant to the

exercise of the Court's discretion that the Commonwealth had been implementing

a resolution of the Security Council. Barwick CI and Gibbs J rejected that

argument at 582. They referred to the fact that the Charter of the United Nations

Act had "approved" that Charter but said;

Brciiiiaii CJ. loohey. Gaudion. Mitlugli and Giininiow JJ

Asa pllirallhofllif HlpllCtiun !;;i!d in em-fr \ Owms ø/rf{2005) 7y AL.IK 1215 31112) -cnlr\ inio llie

iiilcnialioiial agrceiiiciil can create no nghli ni Al!Slra]iaif dnincsiic law M ilhnul llicrf lieitig [tptiibrirtpi jivinp cffcci If)

tlio.'ic Tiphis"

Re}wrt of the Oil-for-Fooii Inquiry

14.

15.

EXH.0001.0021

"iÏinl proviiÏoii does not iiinke the Chin ter itself binding on indhnrÏiiiÏls within Ansirniin ns pari of the hno of the ConinioinnenÏth. in Chow Hung Ching v R-

Dixon / said: "A trenti/ , ni nil events one which dors not feniiiiwtt' a stnte ofiiw, lins no legal effect upon Ihe rights and duties of the siihjerls of the Crown nnd spcnkiiig geiieivlly no power resides in the Crown tri campeÏ I hem to obey Ihe prnvisioiix o f /i treni}/: WnÏker v Bniid'" ", and a similar view was expressed by Lnthnni Cj in R ii

Burgess; Ex parte Henry' Allhough, in those passngcs, incnhon is made of British sitbjecls, il is clear since Johnstone V Pedhi'' thai an alien, other than nn eneiin/ nlieii, IS, u'hile resident in this country, entitled to the proteclion which the Inw affords io British subjects (see also Nissan t Allorney-Geiiernl'^). Section 3 of the Charter of the United Nations Act ioas no doubt an effective provision for the

purposes of internahonal law, but it does not reveni any inlention to make the

Charter binding upon persons within Australia iis part the municipal Imo of this country, and it does no! have limi effect. Since the Charter and Ihe Hesolutiims of the Security Council have not been carried into effect within Auslrnlin by

appropriale legislation, they cannot he relied upon as a pistificniinn for executive acts that would otherwise be unjustified, or rtS grounds for resisting an injiinctiou to restrain an excess of executive power, even if the acis were done with a view to

complying wilh llw Resvhitions of the Security Council. "

We note that the principle .stated by a majority of the Hi gh Court in Minister for

Immigration & Ethnic Affnirs v Tcoh (1995) 183 CLR 273, (to the cffcct that the

ratification of a convention is a positive statement by the lixecutive C o v c m m e nt

of Australia to t he w o r ld and to the Aust ra l i an pei)ple that the Executive

G o v e r n m e nt a nd its agencies will act according to the convention, such thai

ratification m ay give rise to a legitimate expectation,^" in t he abscncc of statutory

or executive indications to the contrary, that a d m i n i s t r a t i ve decision-makers

w o u ld act in conformity with the Convention) is not presently relevant."

We also note that by operaticjn of s 15AB(1) a nd (2)(d) of the Acts Interpretation

Act 1901 (Cth), treaties or other international instruments actxially m e n t i o n ed in a

C o m m o n w e a l th statute m ay be used:

(n) to confimi that the meaning of the provision is the ordinary meaumg conveyed

hy the text of Ihe prnvisinn taking into nccoiint its conlext in the Acl and iJie

purpose or object underlying the Act; or

(h) to determine the meaning of the provision when:

(1MS)77CLK44'). al 478. 11892] AC 491 (19.16)55 CLR 608. al 644 [192 11 2 AC 262, [1970] AC 179, e.sp0.

Report of the Oil-for-Food Inquiry

iiiii'iiiiiiiiyiiiiiiiii EXH.0001.00Z2

(i) lite pravision is aiiibigiipus or obscure; or

(u) the crdininy °ncnuiug conveyed by the text of the provision inking

into occoiinl its cimlcxt in the Act and the purpose or object

underlying the Act lends to n result that is nimiifcsthj absurd or

is unreasonable.

16. Again, thai rule does not affect the answers to the questions asked of us. Neither

does the statement in Minister for Immigration and Ethnic Affairs v Teoh by Mason

CJ and Deane J that:

"It is accepted that n statute is to be interpreted and applied, as far as its

language permits, so that it is in conformity and not in conflict with the

established rules of international law...So expressed, the principle is no more

than a canon of construction and docs not import the terms of the treaty or

ronvenlion into our municipal law as a source of individual rights and

obligations."

17. For completeness, \vc also note that, following the decision of a majority of the

Full Court of the Federal Court (Wilcox and Whitlam JJ) m Nulyanniina v

Thompson (1999) 96 HCR 153, it is clear that international law is incapable of

creating a new Coinmonweahh criminal offence in the absence of legislaticm [25-28), (52-581.

18. !t follows that the answer to Question 1 is "Unless implemented by Australian

legislation they have no direct effect on Australian domestic law", and the answer to

Question 2 IS "No".

Question 3:-Were Security Council Resolutions 661 and 986 incorporated into

Australian Domestic Law in terms? If so, by what mechanism?

Question 4:-By what legal mechanisms did Australia enforcc or support the United

Nations Security Council sanctions prohibiting trade, except trade for humanitarian

purposes with Iraq?

19. Direct incorporation of international instruments into Australian law in terms is,

of course, possible. An example is s 11(1) of the Civil Aviation (Carriers'

Liability) Act 1959 (Cth) which states: "the provisions of the Convention have... the

i V Report of the Oil-for-Food Inquiri/

ril.iiiiiikiiiiiiii EXH.0001.0023

force of law nr Auatralin in relntrnn to nnxj rarringc by nir to which the Convention

apj'lies...".

20. As we explain below, none of the legal mcchaniEni.s which gave domestic effect

to Australia's international obligations arising u n d er Security Council

Resolutions 661 and 986 did so directly in their precise terms.

21. The implementation of the Resolutions in Australian law is conveniently

summarised in an article by Bjll Campbell QC "The Impleinentatwn of Treaties in

Australia" which appears in "International Law and Australian Federalism"

[Melbourne University Press Opeskin & Rothwell (Eds)] where he says this:

"The possibility of utilising existing legislation to implement treaty obligations (including the regulation making powers under existing statutes) is usually examined by the Gouernment, particidarly where the timing of the assumption of an international obligation is urgent and beyond Australia's control. This ivas done, for example, to give effect to the United Nations Security Council

Resolutions imposing sanctions against Iraq. Under Article 25 of the United Nations Charter 1945 those resolutions became binding on Australia

immediately they were adopted by the Security Council. Many of the wide ranging sanctions in the case of Iraq were implemented within days of their adoption by the making of regulations under the Customs Act 1907 (Cth),

relating to the import and export of goods, the Migration Act 1958 (Cth)

prohibiting the entry of certain persons, the Banking Act 1959 (Cth), prohibiting currency transfers betioeen Australia and other countries, and the Air Navigation Act 1920 (Cth) controlling aircraft movements, (pp 235-6)""

22. We agree with that s u m m a ry of what occurred.

23. The implementation within Australia of the Security Council Resolutions

occurred by amendment in 1990 to the following Regulations:

ii] Customs (Prohibited Imports) Regulatio n 13CA;

iii) Customs (Prohibited Exports) Regulation s 4MA and 4QA;

(iii) Air Navigation Regulatio n 119 (formerly 31 ID);

and by conditional exemptions granted from time to time under the Banking

(Foreign Exchange) Regulatio n 39.

24. The Regulations were amended from time to time, and further regulations were

also made, n a m e ly the Migration (Iraq-United Nations Security Council

Camphell also ndMed at l-iiotngtc M i.tti p 1 'l.lhinialcly, tlie sanclions imposed by tlie Security touncil becajnc fai inojc

widc-rattging l-or txanipie, they latct inclLlded ft freeze otl certain asicts willtin Aiislralja. riierclnrc in 1993. Parltatiienl

pa^sed the C h a n ct of the Uniletl Natifi'iS Amendment Act 199.1 (Cth) which cnal>led regulatiuns Iti be made let pivc effecl

lo Security CniMicil saiicliotis trrespective ufexisting romntonwcallli Icgislatiott'

i V Report of the Oil-for-Food Inquiri/

I fiiiiiiimiiiiiiii EXH.0001.0024

Resolutions) Regulation.s 1994. The rele\'ant e.xemption under the Banking

Regulations was revoked by instrument in May 2003, and the remaining

regulations were repealed by the Iraq (Reconstruction and Repeal of Sanctions)

Regulation s 2003, so that all of these measures ceased to operate on 29 May 2003.

25. Our instructing solicitors have prepared a comprehensive list of the regulations

and their essenhal effect, which we attach and adopt.

26. We note that, with one exception, each of the regulations, as opposed to the

exemptions under the Banking (Foreign Exchange) Regulation s, refers directly or

indirectly (the phrase used is 'the international obhgations of Australia") to the

Security Council Resolutions. The exemptions are undoubtedly referable to the

Resolutions. As far as we are aware, these regulations were the only instances of

legislative implementation of the relevant resolutions.

27. Air Navigation Regulation 311D contains the most direct reference to the

Resolutions, although it does not implement the Resolution in its exact terms,

providing, relevantly:

"PARTXVIB " IMPLEMEmATlON OF CERTAIN INTERNATIONAL

OBUGAnONS Airaaft flying to or from Iraq or Kmoait " prohihitian

31]D. (1) An Australian registered aircraft carn/ing cargo must not, witlwul the express approval of the Secretary, travel lo or from Iraq or Kuivait.

(2) A foreign aircraft: (a) carn/mg cargo: and ib) whose destination is Iraq or Kmoait; must not take off from Australia without the express approval of the Secretnn/. (3) An aircraft that has comefi oni, or whose destination is, Iraq or Kuwait must not fly over, or land in, Australia without the express approval of the Secretary. (4) For the purposes of subregulalinns (1) and (2), the Secretary must not grant approval to an aircraft to travel to or from Iraq or Kuwait unless the approval is subject to conditions to ensure that: (a) the aircraft is carrymg food in humanitarian circimistances and is authorised by: (i) the Committee established hy Resolution 661 (1990) of the Seairity Council of the United Nations: or (ii) hy the Security Council: and the food is earned w accordance with Resolution 666 (1990) of the Seairily Council or (b) the aircraft is carrying supplies intended strictly for medical purposes or solely for the United Nations Iran Iraq Military Observer Group. (5) For Ihe purposes of subregiilation (3), the Secretary must not grant approval to an aircraft that has come from, or whose destination is, Iraq or Kuwait to fly over, or hind in, Australia unless the approval is subject to conditions to insure that:

10 Report of the Oil-for-Food htquiri/

ijiiiwiiiiiiiii EXH.0001.0025

(a) the airanft is lo land, or has Itmdai iit n spi\-i5ed aeivdninic oi airfield outside Iraq nr Kuumit lo permit its inspection lo ensure that there is no cargo on board in violation of Resolution 66'!(1990)or 670 (1990) of the Secnrily Cnuncil of the United Nations; or (b) the particiilai flight toas approved h\f the Committee referred to in suhpi!ragraph(4)(a)(i); or

(c) the flight is certified by the United Nntioiis as solehjfor the purposes of the United Nations Iran Iraq Ahlitanj Obseivcr Group. (6) If an applicntion is made to the Secretan/for the purposes of subregiilation(l),(2)or(3), Ike Secretaiy must give the applicant a copy of an English

translation of Resolutions 661(1990),6bb(1990) and fiJOi 1990)of the Security Council of the United Nations. (7) The requirements of tins regulation are in addition tn the requirements of regulation 192."

28. Accordingly the answer to Questions 3 and 4 are:

Question 3 - "Security Council Resolulions 661 and 986 ivere not in terms incorporated

into Australian domestic law, but domestic effect was given lo those Resolutions in °he

manner discussed tn our answer lo Question 4."

Question 4 "By Customs (Prolubiled Imports) Regulation 13CA, Customs (Prohibited

Exports) Regulations 4MA and 4QA, Air Navigation Regulation 119 (formerly 311D),

certain exemptions granted under Banking (Foreign Exchange) Regulation 39, and by

the Adtgratioii (Iraq-United Nations Security Council Resolutions) Regulations 1994.

The relevant exemption under lire Banking Regulations was revoked by instrument In

May 2003, and the remaining regulations were repealed by the haq (Reconstruction and

Repeal of Sanclions) Regulations 2003, so that all of these measures ceased to operate on

29 May 2003."

We so advise.

JAMES RENWICK

] 2 Selborne Chambers

Tel: 9232 8545

9 December 2005

CHRISTOPHER WARD

5 Wentworth Chambers

Tel: 9223 7944

Note: The following opinion, originally issued on 9 December 2005, was revised on 12 December 2005. The revisions are:

Reference to Customs (Prohibited imports) Regulation 13CA in the 'Summary of opinion' at p. 1 and in the body of the opinion

at p. 8, para. 23(i), was replaced by reference to the Customs (Prohibited Exports) Regulation 13CA.

Reference to Customs (Prohibited Exports) Regulation 4MA and 4QA in the 'Summary of opinion' at p. 1 and in the body of

the opinion at p. 8, para. 23(11), was replaced by reference to the Customs (Prohibited Imports) Regulation 4QA.

Source: Ex 3, EXH.0001.0015.

Report of the Oil-for- Food Inquiry 11

Appendi x 2 Consolidate d Letter s Paten t

ELIZABET H TH E SECOND , b y th e Grac e o f Go d Quee n o f Australi a an d He r othe r Realm s an d Territories , Hea d o f th e Commonwealth :

T O th e Honourabl e Terenc e Rhoderi c Hudso n Col e A O RF D Q C

WHEREA S i t i s desire d t o hav e a n inquir y int o certai n matter s relatin g t o decision s o r action s o f Australia n companie s mentione d i n th e Fina l Repor t ("Manipulatio n o f th e Oil-for-Foo d Programm e b y th e Iraq i Regime" ) o f th e Independen t Inquir y Committe e int o th e Unite d Nation s Oil-for-Foo d Programme :

B Y thes e Letter s Paten t issue d i n Ou r nam e b y Ou r Governor-Genera l o f th e Commonwealt h o f Australi a o n th e advic e o f th e Federa l Executiv e Counci l an d pursuan t t o th e Constitutio n o f th e Commonwealt h o f Australia , th e Royal

Commissions Act 1902 an d othe r enablin g powers . W e appoin t yo u t o b e a Commissione r t o inquir e int o an d repor t on :

(a ) whethe r an y decision , action , conduct , paymen t o r writin g of :

(i ) an y o f th e thre e Australia n companie s tha t ar e mentione d i n th e Fina l Repor t ("Manipulatio n o f th e Oil-for-Foo d Programm e b y th e Iraq i Regime" ) o f th e Independen t Inquir y Committe e int o th e Unite d Nation s Oil-for-Foo d Programme ; o r

(ii ) an y perso n associate d wit h on e o f thos e companies ;

migh t hav e constitute d a breac h o f an y la w o f th e Commonwealth , a Stat e o r Territory ; and ^

(aa ) whethe r an y decision , action , conduct , paymen t o r writin g of :

(i ) BH P Limite d (no w BH P Billito n Limited) , BH P Billito n Petroleu m Pt y Limite d o r BH P Petroleu m Limited ; o r

(ii ) Th e Tigri s Petroleu m Corporatio n Pt y Limite d o r Th e Tigri s Petroleu m Corporatio n Limited ; o r

(iii ) an y perso n associate d wit h on e o f th e companie s mentione d i n subparagrap h (i ) o r (ii) ;

i n relatio n to ;

' S u b p a r a g r a p h (a ) o f t h e Letter s P a t e n t d a t e d 1 0 N o v e m b e r 200 5 w a s s u b s t i t u t e d b y thi s s u b p a r a g r a p h (a ) b y Letter s P a t e n t d a t e d 1 7 M a r c h 2006 .

Report of the Oil-for-Food Inqu in/ 13

(iv) the shipment of approximately 20,000 tonnes of Australian wheat to the Grain Board of Iraq in December 1995 - January 1996 {the 1996 shipment)', or

(v) the procurement of any United Nations approval and permission to export under the Customs (Prohibited Exports) Regulations 1958 in respect of the 1996 shipment; or

(vi) any agreements or arrangements made in relation to payment for the 1996 shipment; or

(vii) agreements by AWB Limited to sell 1 million tonnes of Australian wheat to the Grain Board of Iraq in December 2002, including any renegotiations of those agreements (the 2002 contracts); or

(viii) the procurement of any United Nations approval and permission to export under the Customs (Prohibited Exports) Regulations 1958 in respect of the 2002 contracts;

might have constituted a breach of any law of the Commonwealth, a State or a Territory; and^

(b) if the answer to either of paragraph (a) or (aa) is in the affirmative * whether the question of criminal or other legal proceedings should be referred to the relevant Commonwealth, State or Territory agency.^

AND We declare that, in these Letters Patent:

A person is associated with a company if the person is:

(a) a member, officer (within the meaning of the Corporations Act 2001), employee, agent or adviser of, or a contractor to, the company; or

(b) another company that is, in relation to the company, a related body corporate or related entity (within the meaning of the Corporations Act 2001); or

(c) a member, officer (within the meaning of the Corporations Act 2001), employee, agent or adviser of, or a contractor to, a company mentioned in paragraph (b).

AND We declare, without limiting the generality of these Letters Patent, that:

The reference in paragraph (a) of the fourth paragraph to "any decision, action, conduct, payment or writing" of any of the three Australian companies that are mentioned in that paragraph, or any person associated with one of those companies.

2 Subparagraph (aa) was inserted by Letters Patent dated 6 February 2006. Subparagraph (aa)(ii) inserted by Letters Patent dated 6 February 2006 was substituted by a new subparagraph (aa)(ii) by Letters Patent dated 17 March 2006.

^ Subparagraph (b) of the Letters Patent dated 10 November 2006 was amended by Letters Patent dated 6 February 2006.

i V Report of the Oil-for-Food Inquiri/

include s (bu t i s no t limite d to ) an y decision , action , conduct , omission , paymen t o r writin g o f tha t compan y o r perso n tha t occurre d i n th e cours e of , i n relatio n to , o r consequentia l upon :

(a ) an y inquiry ; o r

(b ) an y investigation ; o r

(c ) an y respons e t o an y complaint , inquiry , investigatio n o r allegation ; o r

(d ) an y report , notic e o r disclosure ;

b y tha t compan y o r perso n concerning , i n th e cours e of , i n relatio n to , o r consequentia l upo n an y dealin g b y th e compan y o r perso n with :

(e ) Iraq ; o r

(f ) an y ministry , department , instrumentalit y o r state-owne d compan y o f Iraq ; o r

(g ) an y perso n o r bod y actin g for , o n behal f of , o r fo r th e benefi t of , Ira q o r an y ministry , department , instrumentalit y o r state-owne d compan y o f Iraq. ^

AN D W e declar e tha t th e Commissio n establishe d b y thes e Letter s Paten t i s a relevan t Commissio n fo r th e purpose s o f section s 4 an d 5 o f th e Royal Commission Act 1902.

AN D W e direc t tha t yo u conduc t you r inquiry , t o th e exten t possible , s o a s t o avoi d publi c disclosur e o f commerciall y sensitiv e o r confidentia l materia l whic h you r inquir y require s t o b e produce d t o it .

AN D W e requir e yo u t o begi n you r inquir y a s soo n a s practicable , t o conduc t you r inquir y a s expeditiousl y a s possible , and , no t late r tha n 2 4 Novembe r 2006, t o furnis h t o Ou r Governor-Genera l o f th e Commonwealt h o f Australi a th e repor t o f th e result s o f you r inquir y an d suc h recommendation s a s yo u conside r appropriate. ^

WITNES S Hi s Excellenc y Majo r Genera l Phili p Michae l Jeffery , Companio n o f th e Orde r o f Australia , Commande r o f th e Roya l Victoria n Order , Militar y Cross , Governor-Genera l o f th e Commonwealt h o f Australia .

Date d

Governor-Genera l

B y Hi s Excellency' s Comman d

Attorney-Genera l fo r th e Prim e Ministe r

P a r a g r a p h 7 w a s i n s e r t e d b y Letter s P a t e n t d a t e d 1 7 M a r c h 2006 .

^ T h e r e p o r t i n g d a t e w a s e x t e n d e d f r o m 3 1 M a r c h 200 6 t o 3 0 J u n e 200 6 b y Letter s Paten t d a t e d 1 0 M a r c h 2006 . I t w a s t h e n f u r t h e r e x t e n d e d t o 2 9 S e p t e m b e r 200 6 b y Letter s P a t e n t d a t e d 2 2 J u n e 2006 . T h e r e p o r t i n g d a t e w a s f u r t h e r e x t e n d e d t o 2 4 N o v e m b e r 200 6 b y Letter s P a t e n t d a t e d 2 1 S e p t e m b e r 2006 .

Report of the Oil-for- Food Inquiry 1 5

Appendix 3 Letters to the Attorney-

General

Figure 3.1 Letter to the Attorney-General, 3 February 2006

Inqiiiiy into certain Australian companies in relation to the UN Oil-for-Food Programme

3 Febniary 2006

The Honourable Philip Ruddock MP Attomey-Gesieral Parliament House

CANBERRA ACT 2600

Dear Mr Attorney

Inquiry into certain Australian Companies in relation to the UN Oil-For-Food Programme

I enclose a copy of a statement made by me today.

For the reasons expressed, [ request consideration be given to an expansion of the terms of reference as indicated in my statement,

A draft of the suggested expanded temis of reference with the changes underlined is enclosed for your consideration.

Yours smcerelv

The Honourabte T R H Cole AO RFD QC

Commissioner

PO Box A2320, Sydney South NSW 1235 Telephone (02) 9321 4500 Facsimile (02) 9261 0426 www.oilforfoodinquiry.gov.au

Report of the Oil-for- Food Inquiry 17

Inqiiuy inlo certain Australian companies in relation to the UN Oil-for-Food Programme

Statement by Commissioner

1. The scope 01' tiie lemis of reference of ihli Inquiry have becomc a matter of public

controversy, in those circumstances it is appropriate that I make clear the niaruier

in which I will inierpret those terms. This will assist those who tnay have

evidence they wish to provide relevant to this Inquiry ,

2. The teniis of reference require and pennit iiie to consider whether any decision,

aeiion, conduct, payment or writing of any of the three Australian Companies

mentioned in tile Final Report of the Independent Inquiiy Coinmittee into the

United Nations Oil-for-Food Programme (the Volcker Report) might have

constituted a breach of any law of the Commonwealth, a State or Temtory. The

three Cotnpaiiies mentioned include AWB Limited.

3. The Voicker Report found there was insufficient evidence to make a finding that

AWB knew that payments made by A\\Ti to for Transport and General Trade

(Alia) on account of "trucking fees" or "inland transport fees" were payments

made to the former Iraqi regime. It found that there were circumstances which

should have raised concerns within AWB that such payments were payinents lo

that regime.

4. 1 will, after hearing all the evidence gained by use of the compulsory powers

conferred upon me by the Roya! Commissions Act 1902, make findings regarding

the knowledge of, at least:

a. the Board of AWB

b the two Chief Executive Officers of AWB

c. the senior executives of AWB. and

d. senior management of AWB

regarding the nature of payinents for "trucking fees" made by AWB lo Alia.

5. Having found all relevant facts, I must consider whether the fads as found might

satisfy the constituent ingredients of offences under Commonwealth. Stale or

Territor>' law. Within the range of offences which 1 must consider are those in the

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Report of the Oil-for-Food Inquiri/

Crimes Acl 1914 (Cth) and the Criminal Code. Included in (hat legislation are

ofiinces which I will describe generally as imposing on or defrauding the

Commonwealth, Examples of such offences are found in SS.29B and 29D of the

Crimes Acl and in its successor provisions in ss.l34, 135 and 136 of the Crimimil

Code.

6. As a matter of pnnciple, a person or organisation could not impose upon or

defraud Ihe Commonwealth if the facts alleged to give rise to such imposition or

fraud were known to the Commonwealth.

7. It necessarily follows that the knowledge of the Commonwealth of any relevant

facts is a matter to be addressed by this Inquiry, and is within the existing terms of

reference in the Letters Patent.

8. That means that this Inquiry will address and make findings regarding, at least, the

following:

a. the role of DFAT in the process of obtaining United Nations' approval of

AWB wheat contracts within the United Nations Oi!-for-Food Programme;

b. the knowledge of DFAT in relation to such contracts;

c. what AWB told the Commonwealth, and in particular DFAT, relating lo

the Iraqi wheal contracts; and

d. whether the Commonwealth, and in particular DFAT, was informed of any

knowledge AWB may be found lo have had, regarding payments made by

AWB to Alia.

As part of the material to be considered for the purpose of making the findings

regarding the knowledge of AWB and the Commonwealth, this Inquiry is

considering the material relating lo:

a. the allegation by the Canadian Government lo the United Nations in

January 2000 regarding AWT3 having agreed to undertake payment of

USD 14.00 per metric tonne to a bank account in Jordan "outside the Oil-for-Food Programme^'; and

b. the United States Wheal Associates' allegations during 2003 that AWB

contracts involved "kickbacks" to the Iraqi regime.

10.1 am satisfied that I have the power lo make the findings of fact to which I have

referred under the existing terms of reference.

11. If AWB. or any person affected, is of the view that such inquiry and findings are

beyond those permitted by the existing terms of reference, such perton would be

Page 2

Report of the Oil-for- Food Inquiry 19

entiiled to approach the Federal Court seeking to restrain the scope of this Inquiry.

Were that to occur, for the removal of any doubt, 1 would write to the Attorney-General seeking a widening of the terms of reference to ensure the inquiry was

permitted to conduct such examination and make such findings.

12. The present terms of reference permit me to make findings of possible iiiegality

only ill relation to the three companies mentioned in the Voicker Report. They do

not pennit me lo make findings of illegality against the Commonwealth or any of

its ol'tlcers.

13. It is not the function of a Commissioner exercising the powers of a Royal

Commission to set his terms of reference. That is the function of the Executive

Govenmient. However, if in the course of exercising conferred powers, a

Commissioner enquiring into possible illegality by nominated companies or

persons, encounters material which might constitute illegality by others, it may be

appropriate for the Commissioner to suggest to the Executive Govemraent that the

tenns of reference be expanded to pennit the Commissioner to examine that

prospective illegality by othere.

14. Accordingly, if, during the course of my inquiry, it appears lo me that 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 will approach the Attorney-General seeking a widening

of the terms of reference to permit me to make such a finding.

15. That position has not been reached. The position may change as inquiries continue

and evidence is called. There is thus no basis upon which, at this time, it would be

appropriate for me to suggest to the Attorney-General that the terms of reference

be widened to enable me to make findings regarding whether the Commonwealth,

or its officers, might have breached Commonwealth, State or Territory law.

16. There is, however, material before this Inquiry relating to what lias been called the

Tigris matter. Under the present terms of reference I am permitted and required to

consider the acts and knowledge of AWB and its employees in relation to that

matter. I am permitted lo do so because AWB is a company named in (he Voicker

Report, and because the matter emerges from payments related lo the United

Nations Oil-for-Food Programme.

17.1 am not, however, permitted to make any findings regarding any possible breach

of Commonwealth, State or Territory law by the other parties that may have been

Page 3

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Report of the Oil-for-Food Inquiri/

involved in the transaction, namely BHP Limited and its associated companies

and Tigris Petroleum Corporation Pty Ltd. That is because neither BHP Limited

(now BHP Billiton Limited) nor Tigris Petroleum Corporation Pty Ltd were

mentioned in the Volcker Report.

18. The original transaction preceded the United Nations Oi!-fbr-Food Programme.

However, there is material before this Inquiry which suggests that the original

transaction in 199i-96 might have been in breach of United Nations sanctions.

Were that to be established, ii might be regarded as appropriate to consider in

relation to bolh the original transaction and subsequent dealings between the

companies and AWB whether Commonwealth, State or Territory law might have

been breached. Further, as a matter of fairness to those companies, the matter

having been publicly raised, they should be given the opportunity to present

materia! to this Inquiry regarding whether these transactions were in breach of

United Nations sanctions, or whether there has been a breach of Commonwealth,

State or Territory law.

19. Il seems to me to be incongruous and inappropriate that, under the present terms

of reference, I must make findings regarding the activities of AWB in relation to

the Tigris matter, but am not pennitled to make findings regarding the activities of

Ihe other parties in relation to the same matter. For thai reason I regard it as

appropriate for me to write lo the ,A.tiomey-General seeking a widening of the

terras of reference to permit this Inquiry to investigate and make findings

regarding any breaclies of Commonwealth, State and Territory law by BHP

Billiton Limited and its associated companies and Tigris Petroleum Corporation

Ply Ltd, and persons associated wilh those companies, in respect of the Tigris

matter. 1 will write to the Attorney-General seeking that expansion.

20. It must be recognised that any expansion of Ihe terms of reference is entirely a

matter for the Executive Government.

21. There is one further matter to wliich 1 should refer.

22. Questions have reportedly been raised by United States Senators regarding the

"independence" of this Inquiry. For their benefit, 1 should clarify my position.

23.1 am independent of Ihe Commonwealth Government. Whilst the Commonwealth

Government tiinds this Inquiry, just as il does the Federal Courts and their judges,

Conimissioners of Inquiry lake no instruction from Govcniment. I was for 10

years a judge of the New South Wales Court of Appeal and the Supreme Court of

Page 4

Report of the Oil-for- Food Inquiry 21

New South Wales. The New South Wales Court of Appeal is second in stature

only 10 the High Court of Australia. Judges in Australia are not elected but are

appointed for their skill, integrity and independence. Because of the principle of

independence from Government, once appointed I resolved that 1 would not speak

with Ministers of the Government or any senior officials of the Government. As a

judge I swore an oath to decide matters "without fear or favour, affection or ill

will". As a Commissioner 1 will adhere to that oath.

3 February 2006

Pages

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Report of the Oil-for-Food Inquiri/

ELIZABETH THE SECOND, by the Grace ol God Queen of Australia and Her other Realms and Territories, Head of theCotiiinonwealih;

TO the Honourable Terence Rhoderic Hudson Cole AO RFD QC

WHEREAS it is desired to have an inquiry into certain matters relating to decisions or actions of Australian companies mentioned in the Final Report ("Manipulation of tlie Oil-for-Food Programme by the Iraqi

Regime") of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme:

By these Letters Patent issued in Our name by Our Governor-General of the Commonwealth of Australia on the advice of the Federal Executive Council and pursuant to the Constitution of the

Commonwealth of Australia, the Royal Commisshns Aa 1902 and other enabling powers. We appoint you to be a Commissioner lo 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 Prograrmiie 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

faa) whether any decision, action, conduct, payment or writing of:

(i) BHP Limited (now HHP Billiton Limited). BHP Billiton Petroleum Pty Limited or HHP Petroleum Liiniled; or (ii) Tigris Petroleum Corporation Pty Limited or Tigris

(iii) anv person associated with anv one of the companies in fi)CT(ii); in relation to: (iv> the shipment of approximately 20.000 tonnes of

Australian wheat to the Grain Board of Iraq in December 1995-ianuarv 1996 ("the 1996 shipment"): fv) the procurement of anv United Nations approval and permission to export under the Customs (Prohibited

Exports) Regulations in respect of the 1996 shipment; (v) any agreements or arrangements made in relation to payment for the 1996 shipment: (vi) agreements by AWB Limited lo sell 1 million tonnes of

Australian wheal lo the Grain Board of Iraq in December

Report of the Oil-for- Food Inquiry 23

2002. includinii any renegotiauons ihereof ("the 2002 contracts"): and (vii) the procurement of any United Nations approval and pcnnissions to export under the Customs {Prohibited

Exports! Regulations in resoeci of any shipments under the 2002 contracts: might have constituted a breach of any law of the

Commonwealth, a State or Territory; and (b) if the answer lo fa1 or (aa) is in the affirmativ e, whether the question of criminal or other legal proceedings should be referred to the relevant Commonwealth, State or Territory agency.

AND We declare that, in these Letters Patent;

A person is associated with a company if the person is:

(a) a member, officer (within the meaning of the Coi-porations Acl 2001), employee, agent or adviser of, or a contractor to, the company; or (b) another company that is, in relation to the company, a related body

corporate or related entity (within the meaning of the Corporations Act 2001y. or (c) a member, officer (witliin °he meaning of the Corporations Aa 2001), employee agent or adviser of, or a contractor to, a company

mentioned in pai^agraph (b).

AND We declare that the Commission established by these Extters Patent is a relevant Commission for the purposes of sections 4 and 5 of the Royal Commission Acl 1902.

.AND We direct ihat you conduct your inquiry , to the extent possible, so as to avoid public disclosure of commercially sensitive or confidential material which your inquiry requires to be produced to it.

AND We require you to begin your inquiry as soon as practicable, to conduct your inquiry as expeditiously as possible, and, not later than 31 March 2006, to fiimish Lo Our Governor-General of the

Commonwealth of Australia the report of the results of your inquiry and such recommendaiions as you consider appropriate.

WITNESS His Excellency Major General Philip Michael Jeffery, Companion of the Order of Australia, Commander of the Royal Victorian Order, Military Cross, Governor-General of the Commonwealth of Australia.

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Report of the Oil-for-Food Inquiri/

Dated (10 November) 2005

{PM Jeffery)

Governor-General

By His Excellency's Command

(Phillip Ruddock)

Attorney-General for the Pritne Minister

Report of the Oil-for- Food Inquiry 25

Figure 3.2 Letter to the Attorney-General, 3 March 2006

Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme

3 March jnoft

The Honourable Philip Ruddock MP Attorney-General Parliament House CANBERRA ACT 2600

Dear Attorney

Inquiry into certain Australian companies in relation to the IIN Oil-for-Food Programme

My Letters Patent require me to report by 31 March-2006.

The onginal Letters Patent were expanded on 6 February 2006. This expansion, together with the great number of documents produced lo the Inquiry, and necessary investigation of the matters in those documents, have resulted in the number of witnesses required to be called being greater than initially anticipated. The result is that 1 do not expect lo conclude public hearings of witnesses until the end of March 2005.

Thereafter it will be necessary far those assisting me lo prepare submissions and to give any necessary adverse notices to persons who may be adversely affected. I must then receive submissions from AWB Ltd and other parties potentially affected by my repon. Thereafter it will be necessary for me to fmaltse my views, and my report. The report must then be pubUshed. I anticipate thai the necessary work remaining after conclusion of the public hearings is likely to take three months.

Accordingly, 1 seek a variation to the Letters Patent to permit me to report by 30 June 2006.

I appreciate that the costs consequential upon such an extension cannot be accommodated within the existing budget, and I ask that further funding be provided at an appropriate level to enable completion of the report.

I understand that the Prime Minister has responsibility for the administration of the Royal Commissions Act °902. Accordingly, I am sending a copy of this letter to the Prime Minister.

Yours faithfully

^ U-

The Honourable TRH Cole AO RFD QC

Commissinncr

P O B (K A 2 3 2 0. Sydney South NSW 1235

Telephone (02) 9321 4 6 00 Facsimile (02) 9261 0 4 26 www oilforfoodinqiiiry.gov.au

26 Report of the Oil-for-Food inquiry

Figure 3.2 Letter to the Attorney-General, 3 March 2006

CiSi

Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme

9 March 2006

The Honourable Philip Ruddock MP Attorney-General Parliament House CANBERRA ACT 2600

Dear Attorney

Inquiry into certain Australian companies in relation to the CN Oil-for-Food Programme

Yesterday, Senior Counsel for AWB Ltd raised two issues concerning the interpretation of the Letters Patent,

First, it was contended that paragraph (a) was to be construed to restrict the inquiry' into "any decision, action, conduct, payment or writing'' to any decision, action, conduct, payment or wnting referred to in the Final Report. Il was contended that if the "decision, action, conduct, payment or

writing" was not mentioned in the Volcker Report it wag beyond the scope of the Letters Patent.

The second submission was that this Inquiry could not investigate or address matters concerning internal mqumes made by AWB Ltd or its employees or consultants, nor could it uivesugate or address the response of AWB Ltd to the outcome of such inquiries or to the Volcker Report.

Whilst I do not agree with the construction advanced by AWB Ltd, and am of the view that 1 am entitled to investigate those matters within the existing terms of reference, any doubt in that respect, in my view, should be removed. That is so because, were I to investigate and report upon such matters, it would be open at thai time for any company or person liaving a sufficient interest to approach the Federal Coun seeking a declaration quashing the report upon the basts that it made

findings, which were beyond the terms of reference and thus beyond power.

It seems, from comments made in the hearing, that such an approach is likely to be adopted either by AWB Ltd or some of its directors or employees.

[ mention that Senior Counsel for AWB Ltd contended the points had been raised on 23 February 2006 (T3302 and following). That was day 33 of the Inquiry, I did not understand from the remarks then made that the ruling I then gave was not accepted. Mo proceedings were taken in the Federal Court to restrict the hearing, or to obtain a declaration of the scope of the Letters Patent. The position of AWB Ltd was made clear to me for the first time yesterday on day 42 of the Inquiry (T4154 and following).

PO Box A2320, Sydney South NSW 1235 Telephone (02) 9321 4600 Facsimile (02) 9261 0426 www.oilforfoodinquiry.gov.au

27 Report of the Oil-for-Food inquiry

Ì seek an amendment to the Letters Patent to remove any doubt regarding the power of this Inquir\' to both investigate and report upon the matters to which 1 have referred. A draft of an amendment to this end is enclosed. If the Govemor-General is disposed to grant an amendment, no doubt advice will be taken to ensure that the proposed amendment properly reflects the intention of the Government concerning the width of the Letters Patent, and thus avoid the prospect of lega! challenge both to the Inquiry and its fmdings.

I understand that the Prime Minister has responsibility for the administration of the Ruyul Commissions Act 1902. Accordingly, t am sending a copy of this letter lo the Prime Minister.

Yours faithfully

The Honourable TRH Cole AO RFD QC

Commissioner

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Report of the Oil-for-Food Inquiri/

ELIZABETH THE SECOND, by the Grace of God Queen of Australia

and Her other Realms and Territories, Head of the Commonwealth:

TO ihe Honourable Terence Rhoderic Hudson Cole AO RFD QC

WHEREAS it is desired to have an inquiry- into cermiri matters relaling to decisior^ or actions of Australian companies mentioned in the Final Repon ("Manipulation of the Oil-for-Food Programme b> the Iraqi

Regime") of the Independent Inquiry Commimee into the United Nations Oil-for-Food Programme:

By these Letters Patent issued in Our name by Our Governor-General of the Commonwealth of Australia on the advice of the Federal

Executive Council and pursuant to the Constitution of the

Commonwealth of Australia, the Royal Commissio?is Act 1902 and other enabling powers, Wc appoint you to be a Commissioner to inquire into and repon on:

(a) whether any .decision, action, conduct, payment or writing;. (i) of any of ihc three Australian companies wtuch coinpanies aiy mennoned in the Final Report C'Manipulaiion of the Oii-for-Food Programme by the Iraqi Regime") of the

independent Inquiry Comn^ittee into the United Nations Oil-for-Food Programme, or (iii of 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 ihe question of criminal or other legal proceedings

.should be referred to the relevant Commonwealth, State or Terr!toi7 agency.

AND We declare that, in these Letters Patent:

A person is associated with a company if the person is:

(a) a member, officer (within the meaning of the Cot-porarions ACT 2001), employee, agent or adviser of, or a contractor to, the company; or

(b) another company that is, in relation to the company, a related body corporate or related entity (within the meaning of the Corporations Act 200!); or

(c) a member, ofilcer (within the meaning of the Corporations Act 200}), employee agent or adviser of, or a contractor to, a company mentioned in paragraph (b).

Formatt´); Indent' Lift: 2 9 cm. Hanging: 0.95 cm

I Fcrmatt´!: Indent: Firajine: I 0cm

Report of the Oil-for- Food Inquiry 29

limimiL- ihe nmeralitv of ilie abuvg H;nns of referi-'ilcc thai, in llimc

Ullei> Paienl dated 10 N.iveinlx-r Z0‹5

Ihe in pa^raara n

pavn>ent or writina" af ary of

mentionx^d conipanics mcludcs (wit hout limitation^ anv decision, aciion. conduct. jmis^ion. jpiivmenL or u'ritÌrÌtf of those com part iits of any prison as.sQciaccd witli those commmc^ occuiTini;* m ^c coursc of or in

relation to : fa) anv itiquii'y or

(b) any invøsTÌu.atio.i.VQr

oen^on associated with thoae

nnv g-soimse to anv complaint. in\'estiaation or ailegatÕQn.s or

bv any ªJ i.jhcyg j:omjp_ailie!^_or_anv ayodaicrd^ thohc

companies .concerning,.relating t

of [ªlu Of anv person or bodv acting on Jjehalf ot'or for ihcbenetu of anv ininisitA'. denai'lmeni. instiuiiignD. ijir)' or slate owned company of

into,

AND We declare that tlie Commission established by these Letters Patent is a relevant Commission for the purposes of sections 4 and 5 of the Roya! Commhsion Aa 1902.

AND We diiect that you conduct your inquiry^ to the extent possible, so as lo avoid public disclosure of commercially sensitive or

confidenual matenal which your inquiry requires to be produced to it.

AND We require you to begin your inquiry as soon as practicable, to conduct your inquiry as expeditiously as possible, and, not later than 31 March 2006, to furnish to Our GovcrTior-Gcneral of the

Commonwealth of Australia the report of the results of your inquiry and iuch recommendations as you consider appropriate.

WITNESS His Excellency Major General Philip Michael Jeffery, Companion of the Order of Australia, Commander of the Royal Victorian Order, Military Cross. Governor-

General of the Commonwealth of Australia.

Dated (10 November) 2005

t Formattidi iniJer>{: Left: 2.22

" an, Pifst line: 0 cm

"\ Pkirmattsd: InÛert: LsÃ’: 2,21 I [ cm. hangirig; 1.S9 cm J

I cm, First lire: 0 cm

1 Del´ted: Out

( Delgtedi y

f Oeteted: Bmcompanj

[ Petted: ihc anipant f Deleted: ilicir

; Deleted: unci l Jwiiury 199S

1 Deleted:

i V

Report of the Oil-for-Food Inquiri/

(PM Jcffen)

Governor-General

By His Excellency's Command

(Phillip Ruddock)

Attorney-General for the Prime Minister

Report of the Oil-for- Food Inquiry 31

Figure 3.4 Letter to the Attorney-General, 15 June 2006

hiquiiy into certain Australian companies in relation to the UN Oil-for-Food Programme

15 June 2006

The Honourable Philip Ruddock MP Auomey-Cieneral Parliament House Canberra ACT 2600

Dear Attorney

Inquiry into ccrtain Australian Companies in relation lo ihe UN Oil-For-Food Programmf

1 refer to my °eiter to you of 24 May 2006 in which I indicated a possible program for completion of my report based upon my being able to commence hearing claims for legal professional privilege in the week commencing 13 Jutie 2006. Tliat resulted in a completion date of 15 September 2006.

You are aware that subsequent to ray letter, AWB Limited eoinmenced proceedings in Ihe Federal Court seeking lo have that Court detennine its claims for privilege in respcct of some 2000 documents. The court laid down a time tabic culminating in a hearing on 17 July, and set aside 7 days for hearing. Thereafter a judgment in respect of those documents would be required before this Inquiry could take any further action to conclude any necessary hearings, and give notices of possible adverse findings to companies or persons who might be so affected.

Following upon the Royal Assent yesterday to the amendments to the Royal Commissinm Ac! 1902 confemng a power upon me to determine claims for legal professional privilege, the Inquiiy has today written to AWB Limited, and the Commonwealth, advising a proposed course wliich, assuming the making of appropriate regulations on 22 June 2006, should enable me to commence considering the privilege claims on 26 June 2006. A copy of the Inquiry's letter to .AWB Limited is attached. No doubt the matter will be mentioned before the Federal Court with which I now have a concurrent jurisdiction lo consider privilege claims. Unless restrained by the Federal Coun from so doing, 1 propose to exercise the powers the Parliament conferred upon me as a Commissioner by the amending Acl. .Assuming 1 receive the documents from AWB on 23 June 2006, 1 will commence considering the privilege claims on 26 June 2006.

That is 2 weeks later than the date [ assumed 1 could commence hearing such claims in my letter to you of 24 May 2006. Adhering to the time table referred to in that letter means that it is unlikely the report could be delivered before 29 September 2005.

Accordingly. 1 seek an extension of the lime for delivery of the report until that date. I will, of course, deliver the report prior to that date if it is al all possible. You will understand that the time

PO Box A2320 Sydney SouihNSW 1235 Telephone (02) 9321 4600 Facsimile (02) 9261 0426 www.oilforfnodinquiry.gov au

32 Report of the Oil-for-Food InquirÌ/

table which results in this reporting date makes no allowance for any appeals or other tactical steps that AWB 1 imited might take resulting in yet ftirther delay.

1 understand that the Prime Minister has responsibility for the administration of the Royal Commissions Act J 902. Accordingly. I am sending a copy of tills letter to the Prime Minister,

Yours faithfully

A. U

The Honourable TRH Cole AO RFD QC

Commissioner

2 of 2

Report of the Oil-for- Food Inquiry 33

Appendix 4 Law enforcement access to

lie materials: procedures, November 2005

INDEPENDENT INQUIRY COMMITTEE

INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME

PROCEDURES FOR LAW ENFORCEMENT REQUESTS FOR ACCESS TO IIC

DOCUMENTS AND INFORMATION

Law enforcement bodies should follow the following procedures to request access to information and documents of the Independent Inquiry Committee ("IIC"):

The requesting authority must submit a specific written and signed request to the IIC to the attention of: Susan Ringler, Committee Counsel, Independent Inquiry Committee, 825 Third Avenue, 1 F l o o r, New York, New York, 10022. The signed written request may be forwarded by e-mail to Susan Ringler (sriimlena'iic-offp.or g) and should also be copied to Mark Califano, Chief Legal Counsel (mcalifanofeiic-offp.or a).

The request must include the following information:

a. Identification of the requesting authority and confirmation that it is an authorized law enforcement or judicial investigative body;

b. Confirmation that the request is in furtherance of an official investigation, action, or prosecution;

c. The specific persons, companies, and contract number(s) relevant to the official investigation, action, or prosecution;

d. The specific information requested should be listed by company or individual and should be described as in the IIC report. For each company or individual identified, please organize the request by document type, including: (1) contract documents (identified by contract number); (2) Government of Iraq ministry data (identified by Ministry and contract number); (3) company records; (4) bank records; (5) correspondence; and (6) other records

e. Confirmation that the requested information will be used only for purposes of the official investigation, action, or prosecution and will not be made public in any form without express and written authorization; and

f The point of contact at the requesting body, including e-mail address and telephone number.

Once the IIC receives the written request, it will be reviewed to determine what information may be available for disclosure to the requesting authonty.

November 2005

Report of the Oil-for- Food Inquiry 35

Appendix 5 Correspondence with the

United Nations

Figure 5.1 Letter to Ms Ringler, 23 November 2005

inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme

23 November 2005

Susan Ringler

Committee Counsel Independent Inquiry Committee 825 Third Avenue IS"* floor

New York, N Y, 10022

Dear Ms Ringler

Final Report of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme

By Letters Patent issued on 10 November 2005 by the Command of His Excellency the Governor General of the Commonwealth of Australia I have been appointed a Commissioner to inquire into and report on:

(a) whether any decision, action, conduct, payment or writing of any of the three Australian coinpanies mentioned in the Final Report ("Manipulation of the Oil-for-Food Programme by the Iraqi Regiine") 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 Temtory; and

(b) if so, whether the question of criminal or other legal proceedings should be referred to the relevant Coirimonwealth, State or Temtory agency.

I am required to report the results of my inquiry and such recommendations as 1 consider appropriate to the Governor General of the Commonwealth of Australia not later than 31 March 2006. I have attached a copy of the Letters Patent.

The following companies will be the subject of my investigation:

AWB Ltd, formerly the Australian Wheat Board;

Alkaloids of Australia Pty Ltd;

Distail Rhine Rhur Pty Ltd,

In order to assist me with my inquiry 1 ask that you provide me, as a matter of urgency, with the material which is set out in the schedule to this letter of request.

Temporary Address and Contact Numbers - Level 23, 133 Castlereagh Street Sydney NSW 2000 Telephone 1800 604 604 Facsimile (02) 9581 7343 www.oilforfoodinquiry.gov.au

Report of the Oil-for- Food Inquiry 37

I confirm that the requested itiformaiion mil only be used for the purposes of my inquiry, official action and prosecutions if any prosecutions eventuate.

John Agius S.C. has been appointed Senior Counsel .Assisting She Royal Commission and contact about matters relating to this request may be directed to him care of sheila.butleniiiae t-ov au telephone (02) 9581 7582.

[ thank you for your assistance with this matter and look forward to receivine the material requested,

Your.'i .siiicerelv

The Honourable T R H Cole AO RFD QC

Comitji.ssioner

2 of 3

38 Report of the Oil-for- Food Inquiry 38

SCHEDULB

Report; Independent Inquiry Conmiittee into the United nations Oil-For -Food Programme, Report on Programme Manipulation, October 27, 2005-11-23

All documents, (whether they be in hard copy or electronically stored or imagined) including statements, interviews, faxes, letters, contracts, memoranda referred to in the ahovcmentioned report, either in the text of the report or in the footnotes thereto, between pages 249-299, 300-306, 31 1-325, 392-393, 395-399, 463-464,472-473,474-475, and 480-483 Tables 6, 7 & 8 to the report and relating to any of the persons or entities referred to therein, including but not limited to.

AWB Ltd, formerly the Australian Wheat Board;

Alia for Transport and General Trade

Cotecna Inspection S.A.;

Iraqi Grain Board;

Lloyd's Register Inspection Ltd

Iraq State Company for Water Transport;

Ministry of Transportation and Communication, Iraq;

independent Inquiry Committee into the United Nations Oil-for -Food Programme;

Alkaloids of Australia Pty Ltd

Distall Rliine Rhur Pty Ltd

-7. A. i<

?of3

Report of the Oil-for- Food Inquiry 39

HMZAKiirrH TME SECOND, ly ihi O i a´ ot Or´! of Australia

and Her cihcr Ri-aliiis. unU Tcrriicrks. iHcarl rf the Conunuin'-'Ciillh

TO cite Hoiwurahlu Tcrcniiv Rliuik:rtc Hudsf.u Cult AC RFL> QC

S'lUFRCAS il is ittfsircd hove m´ toquirj- mm cer.aiu matw´ r6l.1iing in fincisinns ci iicuonti iil">iu>iiiiliai. wiMnpaiiics liieswicned iti the Final Ucporl <"Miªnipulation if Hit Oil-Tof-Fooi^ rrnginrnjiii; Ihe Jr-nqi Ucglmii") uf liK!´p.ªfnl<;ni In^uin.' Cniiirtiinte into ilic l.lfnicd Nsiioiis Oil-ryr-Fooi? Progrnin:nt::

liY chusr Lrn´s Pulciit issiied in Our nnmc by Our ODvcniur-Gcncral Cf COHMnor-wuulth ol' AuitialiB on die ´Ivice of Uie pRdi-fal

Cxceutivi Council and uursuam to the Coiisiauii'jii o) ihi

Commoiwe-itlh of AitiiraJia, Uic Roynl CanviussMª.. ^er i!fV3 antl olficf enabiing powcri. We uppWiH you iw be a ConifTiiKsioner to iiKjuiit Kilo and repOil oji,

(a"! whttliiir atiy dccisiun, ;´r.lii:n. coruliir/., puytnt-fH M.-TiJi!)C of any of

I5ic ituct Australian cwttiatijto n.mi£Mi.vd in tU PimI Keport

("Manipulation oJ" lUc Oil-for-Foftd PfOgrHmmi hy rtic IrjWji

Rcginie") of Ihfi itidcnciidem hiciusry Coimniuc'i inio die Untied

Motions Oil-for-Fuoi rragTamme. or s´}' ri^'!"^ ssii.vr.iilrii ª.virti

one oFlliOiic cf-mpanics, inigln h^v-i cowiinnecl a bicutli ot any Uw

oflUc CwiMiiiofiwcailt, a S iW or Terriiory; and

(fci) if so, ivlieiticr the question of crjitimiil <5'" (caal pTQctJcdings

slioulil be rcicirtd lo (hs rcltw.m CuiHiiiuiivvjalth, Siod- or

Ttrritor)- ngcncy.

AMD \V3 dccbne lli-n, in ilicsc Lciicii I'iilciu:

A person is aFSdciatwl with a comp.i.i)' irilic pcrtvii it:

(a) a mctTil^r, (wiihin ihc meaning ofiiic C^rpciAiion Ai.-i

20Qf), cmpioy^e. apcin ur a´lv:icr oi". m a ..x-nirartor to. Uic

co;tªpaiiy, oj

(b) anollicr uompADV is. irt lilnuon tu Uk cc'iMj

body corporate oi ªeinicil eniily (wiiiiiii (hu mcannis ol' Jic

CarfmrfitiOM ^ør^W!)-. or

(c) a mi'imbcr, officcr (viilKii ªhi ªKuniiii Of H/C-iToranons Aci

2(/0i). l;Tl\]Jl<3ye^, a^csii or adviser of, iT cciiiirAi:[nr ic. i t6inijaii\'inin:iinticrfi´i pningrupluh).

INQUIRY INTO C E R T A I. AUSTRALIAN C O M ^ E ^ ^ ^^ R E U T . ON TO THE UN OlL-rOR-FOOD

2

i V

Report of the Oil-for-Food Inquiri/

i A ND U'n riiclnit iKn ilvc CoraniKM,.ii osi!,bli´l.c,l t, ihvic Ltllsi, , rdcvª,,, c!", * *s. *!" ro, purpoic, .,f J . *J "Tf Ihc Cowifjii'ijiiflhT .iff

I ´n We di!iCI !hal yn., *^ *c,, *u. laqui^.^ , *s j po,,,];,. ^^ a!, lo avoid putkc dischjuic ol' oaliiincrcialii' linjinvt 1,1 nnadjniiai lliaiAi tl) winch yoiw ir;qii/ry rt£;tjires ui Off piodiitcd lf> II

A ND Wt TKuiic ym la l.c,!,, j ! ", * q u i iv at soc * prBn´: *blc

!" M iwssibl´, und. m. laur ihjn J1 .^^ar^ll zaiJS, t,i fnnn-.h 10 Oi,, Ouv-cmur^Cercrol nf itic ^-pmiiltmvealil.cf Ausimia Ihe upon iiniit r´bullS(iri'o;irini5uir)',iiitl such rwoinmoinJalions oji you causidcr upprnnriatf

WITNESS His Eitellcncj Mttjm Ociraiil Philin Wiclmcl Jcllciy, CoLipajilon nf iKt Older of Aujin.lij. CDminarafcr or llic ItojTil VjtMian Order. Mitilur)- Cm., Govfi-n^f-GcKal orilª!Ci.nimoiiwc5illh of Ausu-alia.

r^altiil 20115

iTiand

Anompy-Cftntfiat fnr Hie I'rimf Minister

GavinjOi-OeneriJ

INQUIRY INTO CERTAIN AUSTRALIAN COMPANIES IN RELATIO^J TO THE UN OIL-FOR-FOOD PROGRAMME 3

Report of the Oil-for- Food Inquiry 41

Figure 5.2 Letter from Mr Michel, 19 December 2005

United Nations ^^ Nations Unies H E A t H J U A A T i RS . S l E gE NEW VOft K, NV m i l l'

r eu ; I t ; ! 3i ª es . f a ? {: i flfiJ

r e f e r e n c e:

19Dcccmber2005

Dear Commissioner,

Request for documentation of the Independent Inquiry Committ?? OJC)

I refer to your letter of 23 November 2005, addressed to Ms. Susan Ringler, Committee Counsel of the IIC, requesting documents used by the IIC in its investigation of the individuals and entities listed in your letter, to allow you to investigate whether such individuals and entities might have breached 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 rele\'ajit authorities.

As you may be aware, under Article II, Section 2 of the Convention on the Privileges and Immunities of the United Nations ("the Convention"), "[tjhe United Nations, its property and assets wherever located and by whomsoever held, shall enjoy immunity from every form of legal process exccpt insofar as in any particular case it has expressly waived its Immunity." Under Article II, Section 4 of the Convention, "[t]he archives of the United Nations, and in general all documents belonging to it or held by it, shall be inviolable wherever located". The United Nations maintains its privileges and immunities in respect of the requested documentatioti.

The Convention also provides that "the United Nations shall cooperate at all times with the appropriate authorities of Members to facilitate the proper administration ofjustice ..." (Article V, Section 21). Accordingly, we wish to advise that the IIC will provide you, on a voluntary basis, with the documents you have requested for the purpose of the investigations and possible prosecutions, on the express undeiitanding that such disclosure is without prejudice to the privileges and immunities of the United Nations.

The Honourable Terence Rhoderic Hudson Cole AC RFD QC Commissioner Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme Level 23, 133 Castlereagh Street Sydney NSW 2000

Australia

42 Repori of the Oil-for-Food Inquiri/

fKTTEO NATIONS NATSONS LNfES ?KCt 2

- 2-

The staff of the IIC, as experts on mission for the United Nations, enjoy certain privileges and immunities under the Convention. Under Article V, Scction 22(b) of the Convention, such individuals are immune, inter ali a, from legal process of every kind in respect of words spoken or written acts performed by them in their ofriclal capacity.

Accordingly, whilst the Organization shall, without prejudice to the privileges and immtmities of the United Nations, make such IIC staff available on a voluntai>' basis to disctiss the materials provided to you, should you require any fonnal statement ftam any such IIC staff, this will require a limited waiver by the Secretary-General of the

immunity afforded to such individuals.

Please note that these documents are being made available for official use only, and are not to be made public in any form, either in whole or in part, without further express and wrinen authorization.

Yours sincerely.

N

Nicolas Michel

Under-Secreiary-General for Legal Affairs The Legal Counsel

cc: Ms. Susan Ringler

Report of the Oil-for-Food Inquiry 43

Figure 5.2 Letter from Mr Michel, 19 December 2005

United Nations i iP Nations Unies HFAI>Ot'ARTER!i ' SiEQB N E *' VOªªt, NV iftiHI

TEt I i2ij> ªij I:J4 " tax: i [lui ª63 "in´

HEFE RcNCE

13 January 2006

Dear Commissioner,

Request to use materials of the Independent Inquiry Committee (IIC) in public hearings

rhis is further to my letter to you of 19 December 2005 and in response to your letters to me of 4 and 10 January 2006, regarding your request to use IIC materials m public hearings due to commence on Monday, 16 January 2006.

As you know, in order lo assist you with your investigations, authorization was provided by the Organization, wilhout prejudice to the privileges and immunities of the United Nations, for you to be provided with certain IIC materials. These materials were provided for your official use only and on the understanding that further authorization would be required for the release of these materials into the public domain. At that time, in accordance with IIC policy, records of wimcss interviews were withheld by the IIC, although youi office was infotmed as to their content.

In relation to the documents already provided to you, I understand that you wish to be entitled to use such documents in jHiblic hearings as part of your Inquiry. We have considered this request in the context of your Inquiry, taking Into account the level of confidentiality placed by the IIC on such materials. I can confirm that authorization is provided for you to use the IIC materials already provided to you for the purposes stated in your letter of 4 January 2005. In this regand, the Organization continues to maintain Its privileges and immunities in respect of such documents.

The Honourable Tcrence Rhoderic Hudson Cole AO RFD QC Commissioner Inquiry into certain Australian companies

in relation to the UN Oil-for-Food Progriunme Level 23,133 Castlereagh Street Sydney NSW 2000

Australia

44 Repori of the Oil-for-Food Inquiri /

UNI1F.D NAllON't MATIDNI UNtES fªOE 2

- 2-

As regards your request for the production by Ihe IIC of the records of witness interviews, we understand Chat the IIC has already advised you that this will not be possible. As stated in your 10 January 2006 letter, the IIC has provided you with a verbal account of the pertinent points from such interviews and we understand that you are continuing in yew efforts to contact the individuals directly to obtain formai testimony. We can only reilerate that the IIC records of vvitness interviews are not in the fortn of sworn or signed testimony, but comprise internal noles/woik product of the

IIC investigators and, as such, are confidential and may not be released.

Nicolas Michel

Under-Secretary-Gcneral for Legal Affairs The Legal Counsel

cc: Ms. Susan Ringler

Report of the Oil-for-Food Inquiry 45

Figure 5.2 Letter from Mr Michel, 19 December 2005

United Nations Nations Unies REr-VED FEB ZODE

17 Januar>'

Dear C ommissioner,

Kc;^iiv.".i 10 ii ntf mjierials ni'liie InJepen dent InqiiirN Ci.^mmiiici: (llC ) in public hearings

Tills is lurihLT U> m> lc'.!L-r lu yi)u of 13 January 2006. and m response lo the lel!er^ from Mr. John .Xgius Ki Ms. Susan Ringler ol'20 December 2005 and 4 Januar) 21106. which were fonvarded lo us on. 16 January 2006 by ihe llC. reuarJIng the release to your Inquiry ofllC materials and their tjsc in public hearings dtie to commence on

16 Januar> 2006.

.As >ou knov\. in order to assist \ou with sour investigations, atithori^ation was proxided b) the Organization, without prejuJice to the privileges and Immunities of the 1 nlteJ Nations, for you lo he provided with certain IIC materials listed in uiur ScttL-r to Ms, Ringler of Noxembe?' 2005. W iih my ieiter to you of 1 January 201t6. authorization was also pro\ iJcd for you to LLSC these materials In public hearings as pan of your Inqiiir)'. J"he aboven'.ontioncd letters from Mr. .\gius contain requests for the release of additional IIC materials and the use of such additional materials in \our public hearings.

.-Vs stated Ml my letter lo you of!') December 2005. tlic Organization wishes to cooperale at all times w ith the appropriate authorities of .Members to facilitate tiio proper administration ofjustice. We have al.s pri>. lieges and immuniUC^ in lespccl of all materials provided to \ ou and your liiqiiii").

The 1 ionourablc lerence Rhoderic Hudson Cole .'\C) R1 D QC Commissioner Inquiry into ccnain Australian companies

in relation to the UiN Oil-for-i-ood Programme Level 23. 13? Castlereagh Street S>dneyNS\V 2000

.Australia

46 Repori of the Oil-for-Food Inquiri/

2

The sialVnl the [IC, as experts on mission tor the L nited Nations. enio> certain pri\ iScgcs and immtinilies under the Ccnvenlion on the Pri\ ileycs and Iinmunities tM' the United Nations (1946). I nder .\rticlc V. Scction 22i:bi of the Coiiventioti. such indiv iduais are immune, inter alia , friim legal process of c\er> kind in respcct of words spoken Or Written acts performed b_\ thctn in their oliicial capacitv .Accordingl). \vliilsi the Oryani^alion shall, williout prcjudicc to the privileges md immunities of the United Nations, tnake such MC staff av ailable on a \ olunian basis la discuss thf materials pro\idcJ tL> >ou. should \ou require an% lormal .staletnent fnim an\ such IIC stalT. this will require a limited \saiverb>' the Secretary-Genera! of the inimunity alfordeJ lo such indi% iduais.

>ours sincereK.

Nicolas Michel

I'ndcr-SKreiary-Gciicral for Legal .MTairs I he Legal Counsel

cc: Ms. Susan Ringler

Report of the Oil-for- Food Inquiry 47

Figure 5.5 Letter from Mr Golitsyn, 6 April 2006

United Nations W  Nations Unies K E A 3 0 L A H T Z RS ' SIEGE hi

TEL I ( I II . 961 I Å’ 3* > F4X--

* v o R k, NY m o iT

; 12 121 <561 4f"}

RkKfcHiiMCC:

6 April 2006

Dear Comtnissioner,

Request to urterv iew former UN Consultant Ms. Felicity Johnston and for her lo provide a public statement at the hearings of the Australian Roval Conmiissioi) of Inquiry

This is in response to the 5 April 2006 letter from Mr. John Agius to Ms. Susan Ringler in which a request is made to interview Ms. Felicity Johnston and for her to provide a public statement at public hearings of the Royal Commission of Inquiry.

Ms. Johnston wai retained as a Consultant for the United Nations Oil-for-Food Programme. In that capacity, Ms. Jonhston enjoys the privileges and immunities of an expert on mission for the United Nations pursuant lo the Convention on the Privileges and Immunities of the United Nations ("General Conventiori"), 1, U.N.T.S. 15 (1946), to which the Australia has acceded. Under Article VI, Scction 22(b) of the Convention, experts on mission are immune, inter ali a, from legal process of every kind in respect of words spoken or written acts performed by them in their official capacity. This immunity from legal process continues to be accorded notwithstanding that the individual concerned is no longer employed on missions for the United Nations. Accordingly, in order for Ms, Johnston to be interviewed and provide any public statement at public hearings of the Royal Commission of Inquiry a limited waiver by the Secretaiy-General of the immunity accorded to Ms. Johnston is required.

As you know, the United Nations wishes to cooperate at all times with the competent national authorities to fkilitate the proper administration of justice and pursuant to Article VI, Section 23 of the Convention, die Secretary-General has a right and duty to waive the immunity of any official in any case where, in his opinion, the iiuraunity would impede the course of justice and can be waived without prejudice to the interests of the United Nations.

The Honourable Terence Rhoderic Hudson Cole AO RFD QC Commissioner

Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme Level 23, 133 Castlereagh Street Sydney NSW 2000

Australia

48 Report of the OH-for-Foad Inquin/

L K I 7 ED N A T I O NS

- 2-

Therefore, I wish to confirm that the Sccrcta^-Gencral has waived under Article VI, Section 23 of the Convention on the Privileges and Immunities of the United Nations, the immunity from legal process of Ms, Johnston in order for her to be interviewed and provide public testimony in connection with public hearings of tiie Royal Commission.

Yours sincerely,

Vladimir Qoiitsyn/ Director ^

in charge of the Office of Legal Affairs

cc: Ms. Susan Ringter

Report of the Oil-for- Food Inquiry 49

Appendi x 6 M em orandu m o f

understandin g betwee n AU STRA C an d th e Inquiry , Januar y 200 6

Memorandu m o f U nderstandin g

betwee n

th e Director ,

Australia n Transactio n Report s an d Analysi s Centr e (AUSTRAC )

an d

th e Executiv e Officer ,

Th e Inquir y int o certai n Australi a companie s I n relatio n t o th e Unite d Nation s OII-for-Foo d Programm e (th e Inquiry )

o n

acces s t o an d us e o f

Financia l Transactio n Report s (FTR ) Informatio n

Januar y 200 6

Report of the Oil-for- Food Inquiry 51

Tl˘s Memorandum a fl Jndi:rslanJi:ig (MOU) is signed by the Direcior. Australian Transaction Reports and Analysis Centre (tlie Director) and the lixKutive O Ï IICLT If the Inquiry (liii E\ecutive Otiiccr) in order to facilitate access to Financial Transaction Reports inlormatRin (PTR infoffliationl hy the Inquirj.

Purpose

The Director and the l-Accutive Ofilcir lo the Inquir\ have entered Into this MOi; in order to establish cooperiitivc framework witliin which Ihc inquiry and AL'STRAC u ill work together to efiectivcly pcribrm their respective slanitorv' ("unjtions.

1 he key prcn isimss of this MOL' ´ ill reiulate:

levels of online access a\ai:able to the Inquiry.

pn\ acy and securitv- ot'FTR infonnaiion pnivided to the Inquir\-;

aeeountabihty and feedback as to the use that the Inquiry ha*´ made oi Fl K intonnatioii: and

training and support in relation to Oiiline access and the use of F I R mlormatioi! generally.

Access to Fl'R irlbnnation is ici he prtn ided to the Inquiry to assist the Inquiry' iii the perFormanee olit-s functions, as pri.ivided lor in subsection 2'^f t6)(ea) of the J^inuticial TniiiSiU tiim Ri'pon

FTR infonivnion which may he made available to the lnquir>' are:

Sienillean! Cash Transaction Reports °SCTRs);

International Currency Transfer Repon.s tICTRs);

Sitspeet Transactiim Reports (SUSTRs) filed by cash dealers in Australia ´.hiclj relate to tiiaiters falling v^ ithin tlie jurisdiction of the Inquiry; and

Internarional Funds T ranst'cr Instructions (IFl Is).

Memorandum ct U'lderstanding - January 2006 Page 1

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Report of the Oil-for-Food Inquiri/

10

Rules and conditions of online access to FTR information

Online acccss levels and manauemcnt policy

The Director ill prov ide online acccss to FTR inlbrmadan Å’0 Lhe Inquiry subjcci to ihe av-vc... rcstncunns and nilcN and LnnditÓon> ^l¸lcd in lliÓ> MOL' the

Dsrccuir, in tile llrst instance, retains itie nj^ht In cxcrciNe dis.:rcti˚ii in respicl of any parricuLir ac^es-i issue based on its individual merits

Online Kt tlir .-\LSTR.^C' will be pro\ ided to Inquiry personnel ªho require sucli access in order In pcrtonr. their duties c˚'ei^Óu ely .Accordingly, the Oircctnr has øulhonseil the number o! Inquire olTicers spccified in Colunui 1 01 Scheitule ! oi rh-.i \IOU to have o.-iliiie ac^-¸s to llie class or classcs of' l-TR inlomi.iiion iiifeiTed to in (.'oiuiiiii 2 of Sciiedule 1

U hen .in Inq'-io ofllccr ceases lo undenaU dalles wiih ih‰ Inquiry or no longer requires onlini access lo l"TR ini'onnatioii for tiftlcial duties, ihi lr,guir\- will noiity Al.."STRAC in Wfiiing w ilhiii 7 da>> of (In; dulies ha\ ing ceascd Tlis said ol'ticcr's access ciidc ill he iminedialeU cancelled upon rcvcipi oftjie nutsilcalitm.

At.-S I R.AC will take Ihe nccessarc steps lo pruvidc online aecess ui Intiuiry (it'ruer> within 24 hours of receiving written notitic-ition from a senior otfiecr listed in Schedule 2 of this MOU or that senior o!'ti:er'5 nominees

Where °i iiccisioii is t-iken In a senior ot'ficer ol' AUS'I RAC or the lnquir>' to cancel an oi'iÔcer's authonsatioEi fiir online access i^i T I'K inlotinalion the said st.itT nietnt^r's acecss code will he catieelled

Dnhne usage siati^iic.al reports will 'pe pr^l^ ided t>> .AL'STR_^C lo ilie Inquiry as required

Sccrecy and Pri\ acy

.Authorised iinlir.c acccss oftscei-s w.a)' have access lo FTR infoniiaiion in the perfonranee of ihdrorncial duties.

.\tl Iiiquiiv ofilc-cr aulhorised by i'hc liirector to ha\e online .access to FTR inl'onr.ation ]iia> not access, record, div ulge or coiÓununieaie such information e.\ccpl in the pcrfonnance of ihc officer's dunes.

Memorandufr of lJnoerstandi''g - Jariua^ ø006 Page;

Report of the OU-for-Food Inquiry 53

]4 Online .-le^-V^s lo F I K irfiinnalion h\ l;iijjir> ofuccrs \uli not alio´ any comiptioil ot data. In the course ofaccessin;; FTK inior;i.iiion. terminals -hall not be used in doun loaJ hulk data to disk or tape tor purpose- of manipulation ol data Of for any other reason Fjr.henriiire. data accessed bj liikjiiir) officers -hall not he u-ed for data matching purpo-e- unle-s specificaliv authorised the Dirccror Fhi- does not prceiude the dou'nloading of FTR inionr.jiion onto intenial 'vMirk'ihect-i or into applications vuch as electronic F.xcel ar.d . " \ n a l y i .i Noteboc>k

1 .s F.ach Inipcirv otficer .luthorised b> ;'ae i Jirecior lo have online access lo FTR inforrt'-iiinn -hall ntaint.iin a monlhlv record of acecssmns (o fac^-.tiie the preparation of a fcp-.iiT 10 .VL'STRAC outliniiia the Jtu-.ij of FTR infonT,ation lo !::qiji-fs.

'.h .An !nquir> officer viiio has pos-c *urn or control tif II R iniontution " "hall noi use thai inlonnation oilier tiian in accordancc the Royal C ntnniissions .Ac;

1 ^ F i R iniomij'.ion obtained by ihe inquiry, including paper records and eleciroiiic records, wiil bt handled and -tored ir. a ua> Ahich will a! all liir.es ensure security of sucli intontu'ivin

IS An Inquiry ol'ticer m.i\ not di\ jl^c or coniniunicate FI R Act intormjiion except in the perlbnnance oi the officer's du:ies and in accordance wilh section of ihe FIR Act.

Security

ly Online acce-s bj Inquiry olTicer- lo Fl R inforrratmn will be -ubjeci to access control-, to protect boiti the Inquiry and .M SI R;\<' fhe controls will consisi oÌ':

uiiiqce compuier Accc * I'ode 11 ser ldc-niiticr| pro\ i Jed direcily by -\L'STR.\C !¸ the Inquire per-onncl whose names are n.it:tled in wriiing to AL S I K.-\t' by a senior olticcr ijsied in Schedule and

unique User I'assw ord lor c:ich relc\ant liiqi°ii>' officer.

.-Vccess ro ihc system will require u-eo! hoili an "Acce'^- Code and a I scr Passv.ord

'1 .-M S I S AC ´ ill at all times retan; ullirajte control for online .iccc * 'ny all Inquiry oftlcer- ar.d to all clas-es of infunnation h-sed in Schedule 1

22 I hc hiqtui-y ´'ill regularly lerify ihat ihe accession records maintained by hiquiry personnel p:o\ ided ^^ ith online access reconcile with tiie -tdtislical reports provided by .\l STR.-\<' lo the °nqu:r\

riie access code- of ir.acru ; onlir.e acce * ofticers nil! be cancelled on a reeuiar ba-;-

2-1 Inquiry personnel authorised io hj\e oiihiie acccN - lo Fl'R mt'onnaiion vi iU ensure iha! -uch im'orrnalion as ha- beei' nhi.'.ined is proticied hy >uch securily sal'eguards as It IS reisonahlc. in the circuinslanccs. lo lake

MenoTancJ¸m oÌ U'^aerstflod rg - januar,' øÕ3M Page 3

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Report of the Oil-for-Food Inquiri/

against inss. unauthanseJ j^ccss. uTiauihoriscd use vjr ur.authiinscJ diseiosure

against niociiltjatiim and (ithi-r nnsti-i;.

Dcuiils of online access to ilie ALSI R\C dalabasc are lugged bv li.e system The detailed ir.:orma!,i.T. cotiLam::d in the cornpjter access v. ill h; i'.itUble oni> to the director or s-cniar ol'ltcers r>f AL'Sl!i_\C rioir.inatej b\ ihe Director, jr.J the Inquiry or senior otllcers .if-.he lnquir> n,im;r.atcJ b> thr Iiiqutr>

AccountabiliP, and feedback

.As 3ppri.prijle. ihe liiquir> mii prL->-.idi AcSTR AC viith leeJhackoi: the nays ihai I T K inionrtation has assisted the li.qjiry :o perfonn its li:r.ctiv'n-.

Other categories of rinancial information

C}ther calegones ol' tlnancsal inlon^ialion %vhich riiav be in-de 10 Inquirv

officers (in Lhc hasts ijfa demo.nslrateii need niaj i nclude

anahiica! repors prepared hy .XTSTRAC; .ind

other financial iiilnniution AL;STR-\C has received under another Liiv or ihrough a legally constituted agreeir.eiil. v\ Itich il is '.vititni AVSTRAC's aulhi'riiy to release.

The inquirv' may. from time to time, h.-oi a need fur other lhan online access ui I I'R iniiinnation. .\ii> such request u ill lie made in ´riling tn ihe Director .ind signed b> a senior Inquip. ofliccr listeii in Schedule 2 of this Mt>li or an iinliiie aecess olTicer The Director when ciinsidcnng such requests vv ill nake a deierrninaiion ha\ ing regard lo the presence ,inJ °idcqu.ic) of-

a cer'.illcalion iiial the recces: hsr int'iirmalion is relev ant loan oi'liciai irnestiga'.!o:i. proceeding nr administratiiin ol'a Coninionvvealtli, Stale ivr 1 crntop.- law;

a statement spccit\-it!gthe ii.inie ot"the Inquirv oftlcer seeking access to 11 R ininnnation: and

a st.uenien; eoniaining suftkiint loeiitificaiion of the individual or entity named in ilie request to assist exatiiiitation oi available records (eg, n.nnu\ address, date ofbirrh, lde:i:;t'er tnitnbersi to help ensure legitimjcy and accur.-icy of ihc information ^ekcied far disssniinatiiiii

.\i! such requests win be subject l-> the same cnr.diiion^ as spect'lcd ;n ihis M(J(' for online access

Memorandum of Undersl^ndi-g - Jancary ZOOS Page-i

Report of the Oil-for- Food Inquiry 55

Suspect I ratisacrion RcportÔ

;'J ^uspeci Transacllpn Rcpons may he ø°ªemjnalea by AUSl R Af in ihe Inquity for appropnaie eonsideration. The special nature of such reports and she need lo protect the °dentin of person- lumishln^ s-jch repor.s is to he recoi^nised at all times. The Inuuirymay make tise of information contained hi Suspect I ran-action Reports tor intelligence pmposes and or for the purpo-es of obtaining collater;il infonnaiior. in accordance uiiii its siattnory po'.vers.

1 !l is noled b> both parlies lo thiS MOU that under the 1-1 R .Act a Su-pect Transaction Report, a copy of-ueh a report, or a docanier.l piiqsoning io set out tr.l'eniiation in such a report, is not admissible in e\Ìdence in any Icaal proceedinsi (other that! a prnseciitifin tor an offence ayamsi ss 2^11 ! or ss -Ì‹l 1) of the FTR Aetf lividetice is not admissible ,is lo whether a .Su-pecl i ransaction Report ft as prepared; whetlicr a copy of a report, or document purponinii to sci out infonnaiiun coniained in such a repon, as ø^iven lo or received hy ihe Director, or ivhelher panicalar information was contained in a report, Diselosure ol'Su-pect I'ransac.ion RÈpons should not generally be made lo prosecurinit counsel or in hrici's oi evidence, wnJiout prior consiilt.itinn with :he Direcior

32 The Inquiry agrees that all reasonable efforts will be made m e^crcismy its powers, to do so in such a way that wtll :nirii:iiise the prospect of any person w ho h,is funnslied a Suspect I ran.-action Repon hemii called to give evidence m any proceÌdinj:s

I'raining and Support

-AUSTRAC w ill provide training materials to ihe Inquiry online access officer- to assist iliese Inqjiry persoiuiel develop the -kiii- nceessaiy to extract FTR ir.fonnation ihiough online facilities

34 .ALSTR.AC w til keep the inquiry abreast of enhancements to the database inquiry systems and other svsteiiis and in respect to any arraiiizenicni.- which may assist Inquiry in the perlbrmance of its si.-iiuiory fiinciions,

".s IRAC will endeavour to sappon inaior Inquiry iin eitications hy providing other sen ices a- maybe required ihat are within a- siaiutory powers and resource capacity to pTO\ide

.16 The Inquiry w ill assist .AL'SFRAC b> providini; facihties and oiiier assistance where required in order to nieel the needs stated abiive.

.\mcndment

.Any variation to thi- MOU. other lhan ".anations io the Schedule-, w ill require die issue of a tie´ MOL styncd by the Hirecior and the Inquiry Ihe Scheduics maybe varied after written notice by the Inquiry to t!ie Director and writtei; acceptance of sach notice by ihe Fxecuiive Officer 10 tiie Inqairy or as other.vi-e agreed beiwecii the Inquiry and the Director

Uemo-and:.rr o( Unoorst^ndi'^g - January 2006 Page 5

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Report of the Oil-for-Footi Inquiry 63

Tcrminariol!

jS I his MOL' will remaiii in el'fec! unnl repUccd hy a nc´ MOU on thi sani£ subjcci maller oi lentiiiuied. Ilie MOL' n:3\- he isnninaied b> Vinnen noilce b> eillter ilie Direckir or llie Inquiry and will hi :en;iii;a'.ec im tlic pubhca¸cm ol'thL- °nquiiy 's l'ina! report.

Apprni ai

Ï'i 1 his MOL: is erfee¸ve when signed ar.d dated by the Direcii.-'!- and the P..\ecuti\ e Oi'tÏecr io the Inquiry,

Director

Aust-alian Transactor, Retjoris and A-,alysis Csmre

D a te V li "V V

Executive Officer

T ne ir;o certain Austral °an

c o m p a n i es m r e ^ a t on lo Ihe Unilsd

Nations Oil lar Foo-i P r o o r a T me

Dalo Co cScsCsGs-

M s - n o ' S i l d ^ rr o! U n a c r s t a n d i " .g - J a n u a -y 2 0 C6

Page 6

Report of the Oil-for-Footi Inquiry 57

SCIIKD! !.i: I

The Iblluu nij; Inquiry' ofiiLtTS arc authorised to csiii online access (o FI R. information.

Officers of ih? Inquiry ( lass of Information

Corajtiissioner ; 1 ull accc.sii to SUSTRs referred to the Inquiry

1 and restncled lo an indicator anJv in regard to

John Agius Sf ! nil other SLiSTRs.

Greg Nell i - 1 ull ICl R acccss

1

Michael Wigniry -1 ull [FTl actcss

Glenji Owbndee - l ull SCTR access

Stephen N'orreiter 1

Kristy .AlcJtaiiJcr

j

Alice Potion

Asaf Fisher

John Sidoii

Alex Smith

1 ...

Sheila Butler 1

58 Report of the Oil-for-Footi Inquiry 58

sciii:nuLi;:

Tliu officere of llie Imjuii-)' aullionsed to iimify ilii; Diriet'orof ills mimes of personnel puiMianl 10 paragraph 9 and to make rcouesls cl i,;c Utrcclor pursuant to panjiiraph 28 of the MOLl are;

Senior Officers of the Inquiry

CommissioiH T

Sheila Rutlcr

John Agius Sr

Grci? Nell

Glenn Owbriilue

Stephen Vorrcitcr

Report of the Oil-for-Footi Inquiry 59

Appendix 7 Sitting days and witnesses

called

Day Date Witness

1 12 December 2005 No witnesses

2 19 December 2005 Mark Emons (in confidence)

3 22 December 2005 Richard Bryden (in confidence)

James Tyzzer (in confidence)

4 23 December 2005 Adrian Hunter (in confidence)

5 5 January 2006 Nigel Officer (in confidence)

6 6 January 2006 Michael Watson (in confidence)

7 16 January 2006 Murray Rogers

8 17 January 2006 Andrew Lindberg

9 18 January 2006 Andrew Lindberg

10 19 January 2006 Andrew Lindberg

11 20 January 2006 Andrew Lindberg

12 23 January 2006 Bruce Thurgood

13 24 January 2006 Peter Geary

14 25 January 2006 Peter Geary

15 27 January 2006 Christopher Joyce

16 30 January 2006 Peter Geary

17 31 January 2006 Michael Long

18 1 February 2006 Michael Long

19 2 February 2006 Michael Long

Mark Emons

20 3 February 2006 Mark Emons

21 6 February 2006 Dominic Hogan

22 7 February 2006 Dominic Hogan

Charles Stott

23 8 February 2006 Charles Stott

24 9 February 2006 Nigel Officer

Charles Stott

25 13 February 2006 Charles Stott

26 14 February 2006 Charles Stott

27 15 February 2006 Chris Whitweli

28 16 February 2006 Chris Whitweli

Paul Ingleby

29 17 February 2006 Sarah Scales

Report of the Oil-for-Food Inquirif 61

Day Date Witness

30 20 February 2006 Daryl Borlase

Tim Snowball

31 21 February 2006 Tim Snowball

Terry Aucher

31 22 February 2006 Peter Jones

Philip Hughes

Jim Cooper

33 23 February 2006 Jim Cooper

Murray Rogers

34 24 February 2006 Tim Goodacre

35 27 February 2006 Michael Watson

Trevor Fl¸gge

36 28 February 2006 Trevor Fl¸gge

37 1 March 2006 Graham Owen

Stephen Sheridan

38 2 March 2006 Stephen Sheridan

Andrew McConville

David Johnson

39 3 March 2006 David Johnson

Glen Taylor

Terence Charman

Maunce Besley

40 6 March 2006 Brendan Stewart

41 7 March 2006 Brendan Stewart

Richard Fuller

42 8 March 2006 Christopher Moffet

John Simpson

John Thame

43 9 March 2006 Christopher Moffet

Thomas Harley

Philip Aiken

44 10 March 2006 James Lyons

Philip Aiken

Peter Worthington

45 14 March 2006 Bronte Moules

46 15 March 2006 Bronte Moules

Graeme Bowker

47 16 March 2006 Donald Cuddihy

48 17 March 2006 Jill Courtney

Jane Drake-Brockman

49 20 March 2006 Jane Drake-Brockman

Tony Grenenger

Zena Judy Armstrong

62 Report of the Oil-for-Foo ti Inquiry 62

Day Date Witness

50 21 March 2006 Zena Judy Armstrong

Mark Thomas Pierce

51 22 March 2006 Maureen Louise Grant-Thompson

Bronte Nadine Moules

Donald James Cuddihy

52 23 March 2006 Lachlan William Crews

Jeremy Christopher Courtney Bruer

Michael Stephen Tighe

53 24 March 2006 John Barry Prescott

Richard John Fuller

54 27 March 2006 Richard John Fuller

Robin Beaumont

Michael Watson

55 28 March 2006 Jim Cooper

56 29 March 2006 Dominic Hogan

Ian Ross Dˆnges

Wayne Gibson

57 30 March 2006 Dominic Hogan

Peter Hargreaves

Alistair Nicholas

58 3 April 2006 Chris Whitweli

Darryl Hockey

59 4 April 2006 Michael Watson

Nigel Edmonds-Wilson

60 5 April 2006 Mark Emons

Nigel Officer

Andrew Tuohy

61 6 April 2006 Andrew Tuohy

Peter Hargreaves

Charies Stott

62 7 April 2006 Charles Stott

John Tileman

63 10 April 2006 David Stuart

Innes Willox

Peter Varghese

Mark Vaile

Andrew Lindberg

64 11 April 2006 Innes Willox

Andrew Lindberg

Alexander Downer

65 13 April 2006 John Howard

Andrew Lindberg

66 27 April 2006 Darryl Borlase

Mark Emons

67 12 May 2006 Felicity Johnston

Report of the Oil-for-Foo ti Inquiry 63

Day Date Witness

68 30 May 2006 No witness

69 22 August 2006 Jill Gillingham

70 23 August 2006 Jessica Lyons

Dominic Hogan

71 24 August 2006 Dominic Hogan

David Johnstone

Rosemary Peavey

Chris Quennell

72 30 August 2006 Charles Stott

Dominic Hogan

73 26 September 2006 Jessica Lyons

Jim Cooper

74 27 September 2006 Rosemary Peavey

Chns Quennell

75 28 September 2006 Chris Quennell

Charles Stott

Rosemary Peavey

76 29 September 2006 Rosemary Peavey

Trevor Fl¸gge

Andrew Lindberg

64 Report of the Oil-for-Food inquiry

Appendix 8 Practice Note 1, 8 December

2005

lil:illl!llinilll EXH.0001.0005

Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme

COMMONWEALTH OF AUSTRALIA

Royal Commissions Act 1902

PRACTICE NOTE No. 1 8 December 2005

HEARING ADMINISTRATION

1 The Inquiry proposes to sit from Monday to Friday of each week. Usual hearing

hours will be from 10:00 am to 1:00pm, and from 2:00pfn to 4:00pm. The hearing room will be at Level 5, 55 Market Street, Sydney. Hearings will commence on Monday 16 January 2006.

2. The Inquiry's proceedings will be as orderly and expeditious as possible. The

Inquiry will endeavour to ensure that those who may be adversely affected by the

evidence are treated fairly, while protecting confidentiality where that is appropriate.

3. The Inquiry accepts no obligation to notify persons with authorisation to appear or other interested parties of the times and places of its hearings. Details of the public hearings arranged from time to lime may be obtained from the Inquiry's Executive Officer or its Media Liaison Officer, or from the Inquiry's website at www.oilforfoodinquiry.gov.au .

However, a person who, in the opinion of Counsel Assisting, may be substantially and directly interested in evidence to be produced to the Inquiry at a hearing will, if practicable, be notified prior to that hearing of the fact that it is proposed to prodijce the evidence to the Inquiry.

4. Subject to the control of the Commissioner, Counsel Assisting will determine what witnesses are called, what documents are tendered to the Inquiry, and in what order they will call and examine witnesses.

5. The details of evidence to be produced to the Inquiry will not be published in advance of the hearing at which it is produced and generally will not be opened before it is callecf.

Report of the Oil-for-Footi Inquiry 65

I iii-.niiiini m EXH.0001.0006

AUTHORISATION TO APPEAR BEFORE THE INQUIRY

6. Persons may be authorised to appear before the Inquiry. That authorisation may be withdrawn by the Inquiry, or made subject to altered or additional limitations or conditions at any time.

7. Such authorisation to appear entitles the person to whom it is granted to participate In the proceedings of the Inquiry, subject to the Inquiry's control and to sucti extent as the Inquiry considers appropriate. In particular, the Inquiry may.

(a) limit the particular topics or Issues upon which the person may examine and cross examine;

(b) impose time limits upon examination and cross examination;

(c) require that submissions be presented in writing only.

8. Counsel for all persons given authonsation to appear shall give advance notice of any legal issues which they propose to raise. Counsel Assisting will lil

APPLICATION FOR WITNESSES TO APPEAR BEFORE THE INQUIRY

9. All witnesses will tie called by Counsel Assisting. Any person wishing to have evidence of a witness or witnesses placed before the Inquiry Is to notify Senior Counsel Assisting of the names of all such witnesses and provide a signed statement of their expected evidence, If possible in the form of a statutory declaration. Counsel Assisting or Inquiry staff may interview such witnesses and take further statements from such witnesses if considered necessary. It Is not necessary that any such Interviews or the obtaining of such additional statements occur In the presence of the person, or legal representatives thereof, who sought to have the evidence of such witnesses placed before the inquiry. The orderly conduct of the Inquiry will be greatly facilitated if this evidence is made available without delay.

10. Application may be made directly to the Commissioner to call witnesses or place documentary matenal before the Inquiry only In the following circumstances:

(a) application has been mads to Senior Counsel Assisting to call such witness or lender such documents which application has been refused;

(b) thereafter, the applicant has given to Senior Counsel Assisting written notice of the reasons why such witnesses' evidence or documentary material should be placed before the Inquiry;

66

Report of the Oil-for-Food inquiry

i i i i ' i n m iª

EXH.0001.0007

(c) either:

(!) Senior Counsel Assisting has reaffirmed his decision not to place the

evidence before the Inquiry; or

(ii) twro working days have passed since the notice referred to in (b) has

been received by the inquiry without response from Senior Counsel

Assisting.

11. Where a witness has been introduced to the Inquiry by a person authorised to

appear before the Inquiry, an attempt will be made to give that person reasonable

advance notice of the calling of that witnesS-

EXAMINATION AND CROSS EXAMINATION OF WITNESSES

12. Any witness who is legally represented who has been examined (including cross

examined) by Counsel Assisting may next be examined by his or her own legal

representative and then cross examined by or on behalf of any person considered

by the Inquiry to have sufficient interest in so doing. The witness's own legal

representative and finally Counsel Assisting may re-examine. At all times,

duplication and repetition is to be avoided.

13, A copy of any document proposed to be put to a witness in any examination or

cross examination must be provided to Counsel Assisting the Inquiry as soon as

possible after a decision is made to use the document for this purpose, and in all

cases prior to Its intended use.

CONFIDENTIALITY

14, Procedures will be implemented by the inquiry to ensure that confidentiality is

maintained with respect to the identity of persons who assist the Inquiry, and the

irlormallon and documents which they provide, insofar as this is appropriate and

consistent with the discharge ol the Inquiry's functions, Any person who feels

particular concern in this area may communicate his or her concern directly to

Counsel Assisting for determination.

15, The Inquiry will SO far as possible conduct hearings In public. However, the n a m es

and identifying details of informants and witnesses who show a legitimate need for

protection will not be made public, unless the publication of such evidence is

needed for some other sufficient reason, such as to alert potential sources of

significant infonnatioii to the possibility that they can assist the Inquiry. Evidence

which suggests that the person who has othenwise been identified, whether or not

as a witness, has acted as an infonnant will not tie made public.

16. In respect of all oral and documentary evidence, the following practices will apply

Report of the OH-for-Food Inquiry

67

I IIMIHIilMlliit EXH.0001.oooa

jntil vacated or varied either generally or in respect of evidence or categories of evidence:

(a) the testimony of any witness given in public session or documents tendered before the Inquiry may be published unless an order is made prohitjitlng the publication of particular evidence;

(b) no person may take or obtain a copy of any book, document or writing tendered in evidence before the Inquiry exccpt by leave, and then only subject to Ihe condition that it not be used or be permitted to be used except for the purpose of appearance before the Inquiry. Any application for leave to obtain a copy of an exhibit should be made in writing to the Solicitor Assisting.

(c) any person or the legal representative for that person having been authorised to appear before the inquiry may inspect and take extracts from any book, document or writing tendered In evidence for the purpose only of appearance before the Inquiry.

(d) for the purpose of and to the extent necessary for the public reporting of the proceedings of the Inquiry, any authorised media representative may inspect and take extracts from any book, document or writing tendered in evidence after it has been notified as available for inspection by Counsel Assisting, subject to the conditions that:

(1) it not be used or permitted to be used for any purpose other than the public reporting of the proceedings of the Inquiry; and

(ii) any part ot the contents thereof indicated by Counsel Assisting as unsuitable for publication not be published without the leave of the Inquiry, which can be sought if, for example, there is a restnction which is believed to obstruct proper reporting of any matter of significance. Any application for leave should be made in wnting, in the first Instance, to the Solicitor Assisting via the ivledia Relations officer of the Inquiry.

ADDRESSING THE INQUIRY AND SUBMISSIONS

17. At the conclusion of the evidence. It will be decided who will have the right to address the Inquiry, on what Issues and in what order and whether by way of written submissions or otherwise. The present intention is that submissions of Counsel Assisting will be presented 2 weeks after the conclusion of oral evidence, with responsive submissions of other parties tieing received one week thereafter. Any person who receives a notice of possible adverse finding will be given one week to respond in writing to such notice.

68

Report of the Oil-for-Footi Inquiry 68

1411 inwii. fill EXH 0001.0009

VARIATIONS OF PRACTICES

18. The Inquiry reserves the right at any time to vary the above practices.

Source: Ex 2, EXH.0001.0005

Report of the Oil-for-Food Inquirif 69

Ap p en d i x 9 Com m i ssi on er' s rea son s

Figur e 9. 1 Reasons , 8 Februar y 200 6

Reason s

1 . f ) n 6 F e b r u a n 2 0 0 6 S e n i o r C o u n s e l f o r A W B . M r J u d d Q C . w h o a l s o a p p e a r s for

t h e A W B directors , m a d e applicatio n tha t th e I n q u i r y si t onl y l o u r d a y s a w e e k ,

t h e n o n sittin g da y b e i n g F r i d a y .

2 . T h e a p p l i c a t i o n w a s s u p p o r t e d b y M r Forres t S C . C o u n s e l To r M e s s r s L o n g an d

CJear y an d M s Scales . M e s s r s L o n g a n d G e a r y h a v e g i v e n Ih c s u b s t a n c e ol " thei r

e v i d e n c e , an d M s Scale s i s th e w i t n e s s t o f o l l o w t h e p r e s e n t w i t n e s s . T h e

a p p l i e a t i o n w a s als o s u p p o r t e d b y M r .Alle n S C . C o u n s e l f o r M r L i n d b e r g . w h o

h a s als o g i v e n e v i d e n c e . N o n e o f th e o t h e r C o u n s e l , o f w h o n i tlier c a r c n o w m a n y

a p p e a r i n g f o r i n d i v i d u a l w i t n e s s e s , pu t s u b m i s s i o n s i n s u p p o r t o f th e a p p l i c a t i o n .

3 T h e b a s i s o f tli c a p p l i e a t i o n w a s :

a . .AWB . it s C o u n s e l a n d .Solicitors , an d m a n y w i t n e s s e s t o b e calle d a n d thei r

C o u n s e l , w e r e .Melbourn e based . T h e t r a v e l l i n g t o an d fro m S y d n e y e a c h

w e e k t o o k s i g n i f i c a n t time .

b . b e i n g r e m o t e f r o m o f f i c e s a n d c h a m b e r s ha d th e c o n s e q u e n c e t h a t "'suc h

m a t t e r s a s d o e u m e n l m a n a g e m e n t a n d t h e ordinai- y m a t t e r s o f a d d r e s s i n g

issue s wit h o u r r e s p e c t i v e clicnl s i n M e l b o u r n e " e o u l d no t b e d o n e

'effectivel y r e m o t e l y ' " ' . A b u s i n e s s da y w a s n e e d e d i n M e l b o u r n e t o dea l

wit h t h e s e matters .

4 . ITi e s u b m r s s i i m s w e r e s u m m a r i s e d i n t h e f o l l o w i n g w a y ;

" W e iia \ 6 p e r h a p s a lac k o f c o n t r o l o f c o n t i n u i t y wiiiel i o n e

w o u l d o r d i n a r i l y h a \ e i f yo u w e r e l o c a t e d i n th e p o s i t i o n , i n t h e p l a c e i n whici i th e b u s i n e s s , th e l a w y e r s , th e w i t n e s s e s an d lli e h e a r i n g s w e r e t a k i n g p l a c e " . '

5 . I t wa s als o p u t b y M r J u d d tha t hi s instruction s c a m e f r o m " b o a r d level"'." ' I t w a s

sai d tha t i t e o u l d no t b e c x p c e t e d tha t p e o p l e w o u l d c o m e t o S y d n e y l o g i v e h i m

t h o s e instructions .

6. M r ,lud d f r a n k l y m a d e c l e a r that ;

a . hi s instructin g solicitor s ha d a b r a n c h o f f i c e i n S y d n e y , p r e s u m a b l y f r o m

w h e r e thi s e a s e i s b e i n g c o n d u c t e d o n b e h a l f o f A W B a n d it s d i r e e t o r s .

T2079/1 . T20Ki/23 -72081/43 .

PiE e 1

Report of the Oil-for-Food Inquirif 71

b . i t w a s no t bein g pu t tlia t g r a n t i n g a n o n h e a r i n g d a y w o u l d g u a r a n t e e an y

s h o r t e n i n g o f h e a r i n g s .

c . th e t i m e w o u l d no t b e u s e d t o p r o v i d e additicma l statement. ^ t o th e Inquiry .

7 . \ \ h e n a s k e d m w h a t f o r m t h e Inquir v w o u l d b e likel y t o b e assiste d b y g r a n t i n g

t h e no n sittin g da y ther e w a s n o r e s p o n s e o f s u b s t a n c e .

8 . R a t h e r , th e p o s i t i o n w a s pu t tha t th e n o n sittin g da y m a y p r o d u c e earlie r

p r o d u c t i o n o f d o c u m e n t s r e q u i r e d u n d e r s u m m o n s f r o m thi s Inquiry .

9 . I t wa s I'urthe r pu t tha t i n o r d e r t o p r o p e r l y r e p r e s e n t ou r client , w e n e e d t o s p e n d

t i m e attendin g l o m a t t e r s f o r a b a s i n e s s d a y i n M e l b o u r n e " . ' T h a t w a s b e c a u s e o f

t h e dilTicult y o f d e a l i n g w i t h s u c h m a t t e r s r e m o t e l y .

10 . Th e realit y i s t h a t s o fa r a s M r . \ l l e n S C i s c o n c e r n e d , h i s c l i e n t M r L i n d b e r g .

ha s g i v e n t h e b u l k o f hi s e v i d e n c e . Tha t i s a l s o th e c a s e o f M e s s r s L o n g a n d G e a r y

f o r w h o m M r Forres t S C a p p e a r s . W h i l s t M s Scale s r e m a i n s t o b e called , h e r

s u p p l e m e n t a r y s t a t e m e n t h a s b e e n c o m p l e t e d . T h u s , M r Forres t S C a n d M r . \ l l e n

S C h a v e c o n t i n u i n g w a t c h i n g brief s o n b e h a l f o f thei r clients . 1 a m no t p e r s u a d e d

tha t tliei r interest s requir e tha t th e I n q u i n si t onl y f o u r d a y s p e r w e e k . I a m no t

p e r s u a d e d tha t a n y c o u n s e l o r solicitor s a p p e a r i n g f o r o n e w i t n e s s o n l y coul d

m a k e ou t a c a s e f o r a f o u r d a y sittin g w e e k . N o n e s o u g h t l o d o so .

11 . Tli e inatte r thu s resolve s l o a c o n s i d e r a t i o n o f (h e interest s o f .WV H an d it s

directors .

12 . 1 a m no t p e r s u a d e d tha t M r .ludd' s s u b m i s s i o n s s h o u l d b e u p h e l d . T h i s i s s o f o r .

a t ¡east , th e f o l l o w i n g r e a s o n s :

a . I w o u l d h a v e e.-ipecte d tha t . WV B w o u l d h a \ e establishe d a n o f f i c e i n

S y d n e y fo r th e p u r p o s e s o f thi s Inquiry . It s solicitor s hav e a n o f f i c e here ,

an d n o r e a s o n h a s bee n a d v a n c e d w h y th e interest s o f . ^ W B . a n d it s

directors , c a n n o t b e p r o p e r l y s a f e g u a r d e d b y w o r k d o n e f r o m llia t o f f i c e ;

b . ther e i s n o r e a s o n w h y . wit h m o d e m c o m m u n i c a t i o n s , d o c u m e n t

m a n a g e m e n t c a n n o t h e s a t i s f a c t o r i l y a d d r e s s e d f r o m M e l b o u r n e , o r i f th e

d o c u m e n t s b e i n S y d n e y , f r o m S y d n e y ;

c . i l i s n o r m a l l y th e r o l e o f solicitor s t o atten d t o d o c u m e n t m a n a g e m e n t I d o

no t d o u b t tha t . \ W B . an d it s .soHcitors . ar e a p p l y i n g s i g n i f i c a n t lega l

' T 2 0 S 1 / . 1 7

P a g e 2

72 Report of the Oil-for-Food Inqtiir}/

r e s o u r c e s t o tha t task . I s e e n o r e a s o n w h y S e n i o r C o u n s e l slioul d b e

i n v o k e d i n tha t matter ,

d . i t i s k n o v \ n f r o m tli e e v i d e n c e o f Mi " H o g a n , tha t M r C o o p e r . Genera l

C o u n s e l f o r . AWB . sai d a s earl y a s m i d N o v e m b e r t h a t . \ \ \ ' B w a s a d d r e s s i n g

d o c u m e n t s wit h w i t n e s s e s / I ha t task , b y n o w . s h o u l d b e wel l a d v a n c e d , i f

no t c o m p l e t e .

e . th e b u r d e n i n a n I n q u i r y s u c h a s thi s i s o n C o u n s e l . Vssislin g w h o call s al l

w i t n e s s e s , a n d c o n d u c t s a f u l l p r i m a r y e x a m i n a t i o n o f d t o s c w i t n e s s e s . T h e

b u r d e n o n c o u n s e l a p p e a r i n g fo r w i t n e s s e s i s m u c h less ,

f . i f additiona l s t a t e m e n t s ar e t o b e p r e p a r e d , an d t h e r e w a s n o indicatio n give n

tha t t h e r e ar e a n y f u r t h e r a d d i t i o n a l s t a t e m e n t s t o b e f o r t h c o m i n g , tha t w o u l d

n o r m a l l y b e a tas k u n d e r t a k e n , a t leas t t o a n a d v a n c e d stage , b y solicitors .

g . I s e e n o r e a s o n w h y an y n e c e s s a r y c o n f e r e n c e s c a n n o t b e h e l d i n S y d n e y

afte r th e c o n c l u s i o n o f h e a r i n g s o n a siltin g day .

h . i n s o f a r a s M r .lud d m a y r e c e i v e i n s t i u e l i o n s f r o m tli e C h a i r m a n . I u n d e r s t a n d

th e C h a i r m a n l o c o m e f r o m C h i n c h i l l a i n Q u e e n s l a n d . I se e n o r e a s o n w h y

h e c a n n o t c o n f e r wit h Senio r C o u n s e l i n S y d n e y r a t h e r tha n M e l b o u r n e .

O t h e r B o a r d m e m b e r s c o m e f r o m m a n y Stale s w i t h i n . \ u s t i a l i a an d c a n j a s t

a s readil y m e e t i n S y d n e y a s M e l b o u r n e , i f i l b e n e c e s s a r y f o r the m t o m e e t

t o d i s c u s s thi s Inquir y an d it s conduct ,

13. 1 a m no t p e r s u a d e d tlia t eillie r . \ W B . it s d i r e e t o r s . o r a n y w i t n e s s e s w h o migh t b e

calle d b e f o r e thi s I n q u i r y , a r e d i s a d v a n t a g e d b > th e Inquir y sittin g f i v e d a y s e a c h

w eek . Initiall y th e solicitor s f o r . ' \ W B p r e p a r e d hig h leve l s t a t e m e n t s o n b e h a l f o f

f i f l e e n w i t n e s s e s . T h o s e s t a t e m e n t s di d no l i n c l u d e s t a t e m e n t s o n b e h a l f o f

m e m b e r s o f th e B o a r d . W h e n i t b e c a m e a p p a r e n t tha t A r n o l d B l o c h L e i b l e r eoul d

n o l o n g e r ac t f o r al l A U T i e m p l o y e e s , s e n i o r c o u n s e l , j u n i o r c o u n s e l a n d solicitor s

w e r e e n g a g e d o n b e h a l f o f i n d i \ idua l w i t n e s s e s . Whils t th e solicitor s a n d c o u n s e l

f o r individua l w i t n e s s e s m a y b e d e p e n d e n t u p o n .A.\ \ B an d it s solicitor s f o r th e

p r o v i s i o n o f d o c u m e n t s f r o m . ' \ W B . th e b u r d e n o f p r e p a r a t i o n ha s b e e n w i d e l y

spread . I n reality , n o tru e d i s a d v a n t a g e t o .-VUIB . il s director s o r t h e w i t n e s s e s

p r o p o s e d t o b e calle d a t thi s Inquir y ha s b e e n d e m o n s t r a t e d b y a five d a y sillin g

w e e k .

' E x 112 , S t a t u t o i y Declaratio n o f D o m i m c Jol m H o g a n a t [ K S ] .

Report of the Oil-for- Foot i Inquiry 7 3

14. Further, there are interests otlier than those of to be considered. The report

of this Inquiry may have some significance nationally and internationally. It is

important that the report be completed as promptly a.s is possible. This is subject

only to the necessity to fully and thoroughly investigate the matters w ithin the

Terms of Reference and to principles of fairness. Mr Judd properly recognised the

need for me to ha\'e regard to the time constraints presently contained in the

Letters Patent, and to the fact tliat public monies are funding this Inquiry,

l.'i ,\ccordingly I decline to make the directions sought.

8 February 2006

Page 4

Report of the Oil-for-Footi Inquiry 74

Figur e 9. 2 Reasons , 5 Apri l 200 6

Reason s

1 O n 2 4 Marc h 200 6 ther e wa s tendere d a documen t entitle d " Draf t Statemen t o f

Contritio n - Andre w Lindberg" . I t becam e exhibi t 665 . Tli e documen t wa s

provide d t o th e Inquir y a s par t o f tw o volume s wit h a cove r shee t statin g "Emai l

Docutiients : Richar d Fulle r Prepare d fo r th e Col e Inquir v " .

.'Vfte r th e documen t wa s tendered , M r Jud d QC , appearin g fo r AW B Limite d

(" AWB" ) an d it s director s said :

I t ma y be , sir , tha t w e ough t t o mak e som e additiona l inquirie s abou t it s provenance . I t hasn' t bee n hithert o brough t t o ou r attentio n a s on e tha t wa s brough t int o existenc e fo r th e purpos e o f seekin g som e advice , bu t i t ma y wel l be. '

An d later , M r Jud d stated :

Perhap s I ca n d o n o mor e a t thi s stag e tha n t o indicat e tha t w e ar e no t ye t satisfie d tha t i t i s covere d b y th e privilege , bu t 1 don' t wan t t o interrup t m y frien d i n th e cours e o f perhap s askin g som e question s tha t migh t identif y th e rol e tha t thi s witnes s ha d i n it s preparatio n Bu t

w e wil l see k som e instruction s o n i t m an y event. "

2 . .4fte r discussio n I permitte d examinatio n o f D r Fulle r regardin g th e circum.stance s

i n whic h th e documen t cam e int o existence . Th e substanc e o f D r Fuller' s

evidenc e was :

a . Followin g th e releas e o f th e fina l repor t o f th e Independen t Inquir y

Committe e int o th e LInite d Nation s Oil-For-Foo d Programme , an d a t

abou t th e tim e o f thi s Inquiry- , AW B retaine d a n exper t i n th e fiel d o f

"cri.si s management" , a .M r Pete r Sandman. ^

b . M r Sandman' s thesi s 'Sva s essentiall y t o over-apologise , t o apologis e

fo r thing s tha t ha d happened , t o cove r th e groun d an d i n fac t t o g o

fuithe r tha n wa s necessary , an d tha t wa s i n th e interest s o f th e

corporatio n t o d o that , i n temi s o f it s publi c reputatio n an d it s recover y

fro m event s suc h a. s this." *

c . M r Lindber g wa s chosen , presumabl y b y AWB , t o mak e th e apology. ^

d . M r Lindber g considere d th e document s "a s a piec e o f professiona l

advic e whic h h e woul d conside r alon g wit h others , a s wel l a s hi s ow n

v i e w s . M r Lindber g "ha d mixe d view s abou t h. "

' Transcrip t 5270/2 5 - 29 . ^ Transcrip t 5270/3 4 - 39 . ' Transcrip t 5272 , ' Transcrip t 5272/4 1 - 4 6

' Transcnp t 527 4 ' Transcnp t 5274.-4 6 - 5275/ 1

P a g e l

Report of the Oil-for-Food Inquiry 7 5

e. Tlicrc ' "niigiit ha\ e been quite a number " of drafts of the document.Æ

f Initially, there was some uncertainty a.s to whether deliver)' of the draft

statement of" contrition "wa.s to be proceeded v\ ith."''

g. final version o f t he document vva.s nol settled

h. lUtimalely, Mr I.intJbcrg decided not to proceed with the '"over

apology" strategy ."

i Drafts of the documenl were discussed amongst the Chaimian of

.A.\VB and some of its directors.'^

3. Dr I'uller as asked:

Q: Did anyone at those meetings [being the meetings between Mr .Stewart and Board Members] suggest the}' couldn't go ahead with the strategy because any of this [meaning the substance of c.shlbit 665] was untrue'!'

A: No, 1 don't believe sc. no. Sorry, I should correct that. 1 think that was the - I think that was the - in large part the objectiim to it, that it was untrue, m the sense that it went much further m apologising, as it were, than was m fact the ca.sc. and T think that that was the objection to it. that that might be a good crisis management strategy, but it didn't reflect the reality of what had happened, and for that reason that was objected to, so, yes "

4. At tliat point Mr ,!iidd sought ati opportunity to seek iiistnictions to determine

whether the docinneiit was subject to a claim for legal profes.sional privilege.

5. 1 m a de a non-publication order in respect of the document. I also directed that any

evidence in support of a chiim tliat legal professional privilege attached to the

document be filed so tliat the matter could be resoK ed.

6. On 27 March 2006 .Mr .ludd pressed .AWB's claim for legal profe.ssional privilege

in respect of the docinneiit. I was prov ided with a statutory declaration ol' Ms

Rosemary Peavey, Senior Coiporale Counsel al A W B, in support of the claim.

Tliat statutory declaration became exhibit 666. The alTidavit sought to establish

that exhibit 665 had been provided lo the hiquir\ in error because il was

privileged. T wo paragraphs of the affidavit are relevant:

3 On 2S February 2006 two volumes of hard copy documents were produced to the Inquiry and described as "Hmail Documents: Richard Fuller". Those documents were delivered to .ABL in Sydney for deliverv' to the Inquiry. Al the time of production to the Inquuy I believed that those two voltimes had been reviewed to exclude from production any document (or part of any documents) that may be privileged on the grounds that they contained eonl'idential communications passing between lawyer and client for the purpose

' Transcript .'i27.S/l. "franscript .<5275/10- 11. 'Transcript 527.';/14. Transcript .5275, " Transcript 5276,

" Transcript 5277, Transcript 5277'27-37,

Page 2

Report of the Oil-for-Footi Inquiry 76

o f obtainin g o r recordin g lega l advic e o r tha t cam e int o existenc e fo r th e purpos e o f o r i n contemplatio n o f thi s Inquiry."' '

6 . Th e docunien t tha t i s no w exhibi t 665 wa s a documen t tha t wa s no t remove d a s privilege d f o l k w i n g th e revie w an d consequentl y wa s no t reviewe d b y counsel . I t wa s include d b y m istak e i n th e tw o folder s delivere d t o th e Commission . Upo n a subsequen t revie w o f th e document s produce d i n th e tw o volume s i t appear s tha t othe r privilege d materia l ha s als o bee n erroneousl y provide d t o th e Commission . Th e onl y explanatio n fo r th e productio n o f th e documen t (exhibi t 66 5 entitle d "Col e Inquir y - Draf t Statemen t o f Contrition" ) i s tha t I t wa s erroneousl y include d becaus e ther e appear s t o b e n o correspondin g emai l attache d t o I t m th e tw o volume s l o hel p explai n th e provenanc e o r sourc e o f tha t document . Upo n lookin g a t th e documen t an d th e coverin g emai l tha t shoul d hav e bee n attache d t o th e documen t i t i s apparen t t o m e tha t i t forai s par t o f documentatio n prepare d m lat e Decembe r 200 5 whic h wa s prepare d fo r th e purpos e o f obtainin g lega l advic e an d i n conteraplaiio n o f thi s Inquiry.' '

7 . M r A g i u s S C , C o u n s e l A s s i s t i n g , c o n t e n d e d t h a t t h e sta1iitor > d e c l a r a t i o n o f M s

P e a v e y d i d n o m o r e l h a n r a i s e a c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e . H e

s u b m i t t e d i t d i s c l o s e d n o b a s i s u p o n w h i c h t h e c l a i m c o u l d b e u p h e l d . T l i e r e w a s

n o e v i d e n c e i n h e r s t a t u t o r v ' d e c l a r a t i o n o f a n y b a c k g r o u n d o r q u a l i f i c a t i o n t o

s u p p o r t h e r s t a t e m e n t t h a t i t w a s a p p a r e n t t o h e r t h a t t h e d o c t i m e n t f o r m e d par t o f

d o c u m e n t a t i o n p r e p a r e d i n l a t e D e c e m b e r 2 0 0 5 w h i c h wa. s p r e p a r e d f o r t h e

p u r p o s e o f o b t a i n i n g l e g a l a d v i c e . F u r t h e r , t h e d o c u m e n t a p p e a r e d t o b e p r e p a r e d

a s p a r t o f t h e s t r a t e g i c r e s p o n s e r e f e r r e d t o i n e x h i b i t 6 6 1 . T h a t e x h i b i t w a s a

B o a r d B r i e f i n g o n " P r o j e c t R o s e " w h i c h , s p e a k i n g g e n e r a l l y , w a s a p r o j e c t a i m e d

a t f o r m u l a t i n g r e s p o n s e s t o t h e U n i t e d S t a t e s W h e a t A s s o c i a t e s " c o m p l a i n t s , a n d

t h e V o i c k e r I n q u i r y , a n d w h i c h , i t s e e m s , m e r g e d i n t o P r o j e c t I J l a c w h i c h w a s t o

a d d r e s s i s s u e s r e l a t e d t o t h i s I n q u i r y . E x l i i b i t 6 6 1 i l l u s t r a t e d a " s u m m a r v ' o f w o r k

s t r e a m s " w h i c h s h o w e d t h a t t h e p r o g r e s s i o n o f a c t i v i t y i n v o l v e d f i r s t , p r e p a r a t i o n

o f a f a c t u a l c h r o n o l o g y , s e c o n d tli e o b t a i n i n g o f l e g a l a d v i c e a n d a r e v i e w o f

i i n p h c a t i o n s f o r ,A. WB" s U S o p e r a t i o n s l e a d i n g t o . t h i r d , a d e v e l o p m e n t o f A W B ' s

s t r a t e g i c o p t i o n s / a c t i o n s , l e a d i n g t o , f o u r t h , o n g o i n g m a n a g e m e n t o f i s s u e s a n d

n e g o t i a t i o n s w i t h v a r i o u s i n v e s t i g a t i o n s . ' ®

8 . 1 a s k e d M r J u d d t o c o n s i d e r w h e t h e r h e w i s h e d t o p u t o n a n y f u r t h e r e v i d e n c e

r e g a r d i n g

p r o v i d e d .

r e g a r d i n g t h e c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e . ' ' N o f u r t h e r e v i d e n c e w a s

Bxhibi t 666 , Statutory ' Declaratio n o f Rosemar y "Veronic a Peave y date d 2 7 Marc h 200 6 a t 13J . Exhibi t 666 , Statutor y Declaratio n o f Rosemar v "Veronic a Peave y date d 2 7 "Marc h 200 6 a t [6J . ^ ^ Transcrip t 530 9 - lo ' ' ' Transcrip t 5311'4 1 - 4 2 .

Pag e 3

Report of the Oil-for- Foot i Inquiry 7 7

9. Tlie central issue raised by Mr Judd's submissions was that this ]nf|uir> did not

have the power lo detennine whether any claim for legal professional priv ilege

should be upheld, thus justifying non-production of documents. lie said;

Tl is not a claim to be made out in this Commission, sir. It is a claim to be made out, if at ail. in a court of law This Commission, sir. does not have the power or authority, in our submission, to determine whether or not there is a claim for legal professional privilege. If the (?oramission contends that the claim, if made, is inappropriately made or had, and insists on

the production of a category of documents, then it may be up to us to seek to have the matter resolved. We acknowledge that. But it is not for this Commission to make the determination "

10. Expanding up on this. Mr .ludd submitted:

If the parties agree that the Commissioner should resolve the issues, so be it. but if, in response to coercive process issued by an inquirv' such as this, the ."WVB declines to produce a categorv' of documents that would otherwise be required to be produced, that crystallizes the issue, and it is at that point that one roust decide what is the appropriate procedure,

it is not for this Commission to then decide on the c,'

11. Mr .Tudd contended that the reason wliy . 4 WB was not required lo produce

documents in response to a notice issued by the Inquin, pursuant to the p o w er

contained in the Royal Commissions Acl °902 (Cth) ("the .Act") was because:

.in the proper cxercise of power, the Commission is not authorised to is.sue a notice for the production of privileged material. Now, if it is caught up in the general fomi of the notice because it is relevant then if the Commission insists on its production we must do something about that. But the power of this Commission, in our submission docs not extend to the production of privileged material.""

12. I asked for any authority to support the proposition that an executive bodv',

exercising the executive power of the Commonwealth, and confened with the

powers contained within the .Act. did not have the power to decide a claim m a de

for privilege, here legal professional privilege, but none has been provided to me.

13. Exhibit 665 is a document produced by the solicitors for A WB Limited lo this

Inquiry pursuant lo a notice addressed lo Dr Fuller, being Notice 14 of 2006 dated

14 January 2006. In response to that notice, three tranches of documents were

produced, the first on 17 Febniary 2006, the second on 23 Febniar> 2006, and the

third on 3 March 2006. Exhibit 665 was coniained in the last tranche, llie notice

was issued to Dr Fuller pursuant to s 2(3.A) of the Act.

Transcript 5298/2 - 11 " Transcript 5299/25 - 41. Æ Transcript 5.300/8 15

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Report of the Oil-for-Footi Inquiry 78

AWB's Submissions Regarding Pi-ivilcgp

14. On 12 Januiuy 2006. prior to the conimcncemcnt of the public hearings. .AWB

provided to the Inquirv' a helpful m e m o r a n d um regarding its submissions

concerning legal professional privilege. It did so upon the basis that the Inquin

had summoned Mr Cooper. General Coimsel for .XWn. to give oral evidence

before (he Commission, and had served several notices pursuant lo s 2{^A) of the

Act seeking lo compel .WVB or its employees to produce various categories of

doctmients including documents over which .A.\^'B claims legal professional

privilege. Il is convenient to set out a portion of those submissions.

I). THE ACT DOES NOT ABROGATE LEGAI. PROFF.SSIO.\AL

PRIVILEGE

36 In Tile Daniels Coqjorarion Intemattuna! Ply Ltd v Australian Competition and Consumer Commission (Daniels), the High Court unaniniously held that legal profes.sional privilege could be claimed to resist a notice to produce documents issued pursuant to si 55 of the Trade Practices Act 1974 (Cth) (a section that confers upon the ACCC powers that are in many respects analogous to those available to the Commission).

37. Glce.son CJ. Gaudron. Gummow andllaj'nc JJ said

Being a rule of substantive law and not merely a rule of ei idence. legal professional privilege is not confined to the processes of discovery and inspection and the giving of evidence in judicial proceedings Rather and in the absence of provision to the contrary, legal professional privilege may be availed of to resist the givmg of mlbrnialion or the production of documents

in accordance with investigatory procedures of the kind for which s 155 of the .Act provides...

Legal professional privilege is not merely a rule of substantive law It is an miportant common law right or, perhaps, more accurately, an important common law immunity It is now well settled that statutory provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary implication to that effect That rule, the e.xpression of which in this Court can be traced to Potter vMinaham. was the foundation for the decision in Baker v Campbell. It Is a rule which, subject to one possible exception, has been strictly applied hy this Court .

38 In the above passage the High Court confirmed that 'legal professional privilege may be availed of to resist the giving of information or the production of documents in accordance with investigatory procedures" of the kmd conferred by the .Act, unles.s the Act overrides that privilege by clear words or necessary implication. That rule of interpretation is to be 'strictly applied'

39. The .'\ct does not mention legal professional privilege. Plainly, therefore, it does not abrogate that privilege expressly. The only issue is whether the Act abrogates legal professional privilege by 'necessary implication'.

40. The phrase 'necessary implication' 'iniports a high degree of certainly as to legislative intention' InDaniels, McIIugh J said that the courts will not hold that the legislature has overridden a fundamental right by nece.ssary implication unless;

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79 Report of the Oil-for-Food inquiry

the legislative provision would be rendered inoperative or its object largely frustrated in its practical application, if the right, freedom or immunity were to prevail over the legislation. A power conferred in general terms, however, is unlikely lo contain the necessarv' implication because "general words will almost always be able to be given some operation, even if that operation is limited m scope"",

41 The Acl does not reveal any intention to abrogate legal professional privilege It contains three provisions that authorise a Commission to require the production of documents, each of which is found in s 2 of the .Act, Thai section empowers the Commission to obtain documents by:

1 summoning a person to produce documents at a hearing (s2( 1 )(b)); 2. orallv require a person who is present at a hearing to produce a document (s2(2)); or -T issuing a written notice that requires a person to produce a document at a

time and place specified in the notice (usuallv in advance of the hearing) (s2(3A)),

42. Section .3 gives coercive effcct to the powers conferred by s 2, by creatmg various offences that relate to failure to comply with requirements imposed under s 2. Consequenlly. the extent of the obligations imposed by s 2 can only be understood when that provision is read in light of the consequences of non-compliance specified under s 3, That is significant, because s 3 provides thai m certain circumstances a person will not commit an offence even if the person refuses to comply with a requirement imposed pursuant to s 2.

43. Section3 relevantly provides: (2) A person appearing as a witness at a hearing before a Commission shall not fail to produce a document or other thing that the person Was required to produce by a summons under this Act served on him or her

as prescribed or that the person was required to produce by the member of the Commission presiding at the hearing (2A) Subsection (2) is an offence of strict liability. (2B) Subsection (2) does not apply if the person has a reasonable excuse (3) It is a defence to a prosecution for an offence against subsection (2) constituted by a failure to produce a document or other thing to a Commission if the document or other thing was not relevant to the matters into which the Commission was inquiring. Note A defendant bears an evidential burden m relation to the matters in subsection (IB), (2B) and (3) (see subsection 13.3 (3) of the Cruninal Code), (4) A person served with a notice under subsection 2(3A) must nol refuse or fail lo produce a documenl or other thing thai the person was required to produce in accordance with the notice Penalty: Sl.OOU or imprisonment for 6 months (5) Subsection (4) does not apply if the person has a reasonable excuse. (6) It is a defence to a prosecution for an offence against subsection (4) constituted by a refusal or failure to produce a document or other thing if the document or other thing was not relevant to the matters into which the Commission was mquirmg. Note: defendant bears an evidential burden in relation to the inatters in subsection (.s) and (6) (see subsection 13.3(3) of the Criminal Code).

44. Section 6.1 of the Criminal Code provides that (1) If a law that creates an offence provides that the offence is an offence of strict liability: (a) there are no fault elements for any of the physical elements of the

offence; and (b) the defence of mistake of fact under s 9 2 is available.

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Report of the Oil-for-Footi Inquiry 80

45. The combined effect of the above provisions is that I'l) If a person is required to produce documents at a hearing (either by summons, or orally during the course of the hearing), the person commits an offence against s.l(2) ('which is a strict liability offence)

unless the person can discharge the evidential burden of showing either that (a) the person had a 'reasonable excuse' for failing lo produce the document, or

(b) the document or other thing was not relevant to the matters Into which the Commission was inqurring. (2) If the person is required by a notice issued under s 2(,lj\) of the Act to produce documents prior to a hearing, the person commits an offence

against s 3(4) (which is not a strict liability offence) unless the person can discharge the evidential burden of showing either that: (a) the person had a 'reasonable e.xcuse' for failing to prtiducc the document: or

(b) the document or other thing was not relevant to the matters into which the Commission was inquiring-

46. The offences created by s 3(2) and 3(4) of the Act are both subject to a 'reasonable excuse' defence. The meaning of that term is therefore critical to the question of whether a person is required to produce documents to the Commission (whichever of the three powers to require the production of documents is used)

47. Section IB of the Act provides that: reasonable eircMse. .means an excuse which would excuse an act or omission of a similar nature by a wimess or a person summoned as a witness before a court of law

48. That definition makes it plain that the .A,ct does not abrogate legal profe.ssional privilege That is so because a claim of legal professional privilege would obviously excuse a failure or refusal to provide documents before a court of law.

49. Indeed, even if the term 'reasonable excuse' was not defined it would likely have included legal professional privilege. As Gaudron .i said in Commissioner of Corporate Affairs v Yuill. the term 'reasonable excuse' 'is quite wide enough to cover any m alter which the law acknowledges by way of answer, defence, justification or excuse for refusing or failmg to provide mformation,' The phrase includes, but extends beyond, Ihe established common law privileges

50. The existence of a 'reasonable excuse" defence demonstrates that the Act does not reveal any intention, let alone an unequivocally clear 'necessary intention", to abrogate legal professional privilege.

F. CONCLUSmN

51 .'Accordingly, the Commission has no power to require AW'Ti to produce documents or answer questions in circumstances in which legal professional privilege applies. .A.S ihe pnvilege applies in relation to each of the documents identified m this submission. .'\"VVB is not required to produce those documents."

15. I take that submission, together with the oral submissions from Mr .ludd to which

I have referred, to be the submission in support of A W B 's contentions.

Submissions of AftTi Limited Concerning Legal Professional Privilege dated 12,'l:'06at (36| - |5I1 (footnotes omitted).

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81 Report of the Oil-for-Food inquiry

16. Il is to be noted liiat:

a. the written submissions do not address the issue of whether this

Inquiry- has power to detennine whether any claim for legal

professional privilege should be upheld Presumably that is because of

what is said in paragraph 48. namely that claim"' of legal

professional privilege would excuse a failure or refusal to provide

documents before a court of law. 'nnis the mere making of the claim,

as di.stinct from establishing the claim, is said to negate the otherwise

existing obligation to produce documents, lliat was the oral

submission advanced.

b. Nonetheless, in the conclusion in paragraph 51, non-production is

justified because legal professional privilege "applies" to documents

the subject of a s 2(3 A) notice.

In the subinissions, there has been elision from 'claim', to established claim.

17. Since the commencement of public hearings. .WVB has claimed before me. on a

myriad of occasions, legal professional privilege to prevent disclosure of legal

advice, either through production of documents or the giving of oral evidence. I

have made clear 1 would uphold those claims and have invariably done so.^' ITiis

practice, over some 50 days, does not sit comfortably with the submission m a de in

respect of exhibit 665. that the Inquiry' does nol have power to nile on a claim for

legal professional privilege.

Issues for ronsideration

18. Eight issues arise for consideration:

a. Does the .A.ct abrogate legal professional privilege in relation to the

production of documents?

b. If not, does the existence of the entitlement to claim legal professional

privilege in respcct of documents otherwise the subject of a notice

pursuant to s 2(3.A) negate the power to issue a notice pursuant lo s

2(3.A) to require production of such documents?

" For a recent decision on the scope of matters to which ihe concept of legal professional privilege applies, see Three Rivers District Council mid Orsv Governor and Company of thi Bank of England fWo [20U514 ER 948, in particular at 964, 991.

BeS

Report of the Oil-for-Footi Inquiry 82

c . I f t h e a n s w e r t o q u e s t i o n s ( a ) a n d ( b ) i s n o . i s t h e m a k i n g o f a c l a i m f o r

l e g a l p r o f e s s i o n a l p r i v i l e g e . s u f f i c i e n t t o n e g a t e t h e o b l i g a t i o n t o

p r o d u c e d o c u m e n t s t o a R o y a l C o m m i s s i o n e r , o r p e r s o n n o m i n a t e d b y

s u c h c o m m i s s i o n e r , i m p o s e d b y s .^(4 ) o f t h e . Act ?

d . I s i t n e c e s s a r y f o r a c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e t o b e

e s t a b l i s h e d ( a s d i s t i n c t f r o m c l a i m e d ) b e f o r e a p e r s o n s e r v e d w i t h a s

2(3.A. ) n o t i c e i s r e l e a s e d f r o m t h e o b l i g a t i o n t o p r o d u c e d o c u m e n t s

o t h e r w i s e t h e s u b j e c t o f t h e n o t i c e ?

e . D o e s I h e e . v i s t c n c c o f

i . a c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e , o r

ii . a n e s t a b l i s h e d c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e

con.stitut e " r e a s o n a b l e e x c u s e " w i t h i n s 3 ( 5 ) o f t h e . Act ?

f C a n a R o y a l C o m m i s s i o n e r d e t e r m i n e w h e t h e r a c l a i m f o r l e g a l

p r o f e s s i o n a l p r i v i l e g e i s e , s t a b l i s h e d , o r m u s t s u c h a c l a i m b e r e s o l v e d

b e f o r e a c o u r t , r e l e v a n t l y t h e F e d e r a l C o u r t ?

g . D o e s a p e r s o n s e r v e d w i t h a s 2 ( 3 . 4 ) n o t i c e b e a r t h e o n u s o f

e s t a b l i s h i n g t h e c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e ?

h I f t h i s Inquir> - h a s p o w e r t o d e t e n n i n e w h e t h e r a c l a i m f o r l e g a l

p r o f e s s i o n a l p r i v i l e g e h a s b e e n e s t a b l i s h e d , h a s s u c h c l a i m b e e n

e s t a b l i s h e d i n r e l a t i o n t o e x h i b i t 6 6 5 ?

Reason s fo r Decisio n

19 . I n m y v i e w t h e s u b m i s s i o n t h a t d o c u m e n t s a r e e x c l u d e d f r o m t h e o b l i g a t i o n o f

p r o d u c t i o n m e r e l y b e c a u s e a n u n e s t a b l i s h e d c l a i m o f l e g a l p r o f e s s i o n a l p r i v i l e g e

i s m a d e w h e n d o c u m e n t s a r e r e q u i r e d l o b e p r o d u c e d p u r s u a n t t o c o m p u l s o r y

p r o c e s s u n d e r t h e .Ac t d o e s n o t a c c o r d w i t h a p r o p e r c o n s t r u c t i o n o f t h e .'Vet . I

a l s o d o n o t a c c e p t t h a t a c o m m i s s i o n o f i n q u i r y o r R o y a l C o m m i s s i o n , e x e r c i s i n g

p o w e r s u n d e r t h e A c t . d o e s n o t h a v e p o w e r t o d e t e n n i n e w h e t h e r a c l a i m f o r l e g a l

p r o f e s - s i o n a l p r i v i l e g e s h o u l d b e u p h e l d , a n d tha t t h e m a t t e r m u s t b e d e t e r m i n e d

b y t h e a p p r o p r i a t e c o u r t .

2 0 . I t i s t o b e u n d e r s t o o d t h a t w h e n a n o t i c e i s i s s u e d p u r s u a n t t o s 2 ( 3 A ) o f t h e . Act ,

r e q m n n g p r o d u c t i o n o f d o c u m e n t s , i t i s n o t k n o w n w h e t h e r a n y c l a i m f o r l e g a l

Pag e 9

Report of the Oil-for- Foot i Inquiry 8 3

professional privilege will be available or m a de in respeel of documents within the

purview of the notice.

21. Tlie power to compulsorily require production is a power conferred by the .Act.

'llie extent of the power so conferred is thus to be detemiined by a constniction of

the prov isions of the .Act.

22. Resolulion of the issue concerning the obligation to produce documents when a

s u m m o ns or notice issued under compulsive process requires production of

documents in respcct of which legal professional privilege is claimed is resolved

by the decision in Daniels Corporation v ACCC."' That decision did not establish

that a mere claim of legal professional privilege negated the obligation to produce

documents as required by a compulsive s u m m o ns or notice. It established that

where a statute pennitled the issue of a compulsive sunnnons for production of

documents, unless the stalute expressly or by necessary intendment negated the

claim for legal professional privilege, such legal professional privilege could be

claimed, and. if established, the obligation of production was negated because the

statute had to be read down to accommodate the subslanlive immunity of legal

professional privilege,

2.'?. Tlie appropriate principles and approach are found in the joint judgement of the

majority of Gleeson C.I, Gaudron. G u m m ow and Hayne .1.1, It is important to

understand the nature of the proceedings in thai case.

24. In Daniels Corporation, a notice had been issued pursuant to s 155 of the Trade

Practices Acl 1974 (Cth), Hie majority judgement recorded:

The solicitors prtxluced some but not all of the documents specified in the notices. They and the Corporation claimed that ihe remaining documents were the subject of legal professional privilege and that s 155 of the Act does not authorise the ACCC lo require production of

documents to which thai privilege attaches."

25. 'llie A C CC commenced proceedings in the Federal Court for a declaration that the

corporation was not entitled to refuse to produce documents on the grounds of

legal professional privilege and. also, an order requiring it lo produce specified

"(201.12) 213 CLR 543 Darnels Coi-poration International Pty Ltd v ACCC (2002) 213 CLR 543 at 549 [2] per Gleeson CJ. Gaudron. Gummow and Hayne .U,

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Report of the Oil-for-Footi Inquiry 84

d o c u m e n t s . " l l i c q u e s t i o n w i i e t l i e r s 1 5 5 o f t h e . \ e t iiiitliorise d I h e A C C C l o

r e q u i r e p r o d u c t i o n o f d o c t n i i e n t s t o w h i c h l e g a l p r o f e s s i o n a l p r i v i l e g e a t t a c h e s

w a s i s o l a t e d a s a p r e l i m i n a i y i s s u e a n d r e f e r r e d t o t h e F u l l C o u r t o f t h e F e d e r a l

C o u r t f o r d e c i s i o n . I l i e F u l l C o u r t h e l d s 15 5 d i d a u t h o r i s e n o t i c e s r e q u i r i n g t h e

p r o d u c t i o n o f s u c h d o c u m e n t s ;ui d d e c l a r e d t h a t t h e s o l i c i t o r s w e r e " n o t e n t i t l e d t o

refu.s e t o c o m p l y w i t h . . . t h e n o t i c e s . . . o n t h e g r o u n d o f l e g a l p r o f e s s i o n a l

p r i v i l e g e " . . A s p a r a g r a p h 4 o l t h e j o i n t j u d g e m e n t i n t h e H i g h C o u r t .stales :

Havin g mad e thos e orders , i t wa s unnecessar y fo r th e Federa l Cour t t o determin e whethe r o r no t privileg e attache d t o an y o f th e document s th e subjec t o f th e notice s unde r s 15 5 o f th e Act.- '

2 6 . Tli e H i g l i C o u i t r e v e r s e d tha t o r d e r . I n l i e u , i t h e l d t h a t :

- i t shoul d b e declare d tha t s 15 5 o f th e Ac t doe s no t abrogat e lega l professiona l privileg e an d th e ACC C shoul d b e ordere d t o pa y th e appellants ' cost s o f th e proceeding s i n th e Ful l Court . Th e matte r shoul d b e remitte d l o th e Federa l Cour t t o determin e what , i f any , o f th e document s specifie d i n th e notice s ar e th e subjec t o f lega l professiona l privileg e ^

2 7 . I t i s a p p a r e n t f r o m t h e o r d e r m a d e b y t h e H i g h C o u r t t h a t t h e m e r e m a k i n g o f a

c l a i m f o r l e g a l p r o f e s s i o n a l p r i \ i ! e g e i s n o t s u f f i c i e n t t o r e b u t t h e o b l i g a t i o n o f

p r o d u c t i o n . O n l y t h o s e d o c u m e n t s w h i c h a r e f o u n d t o b e c o v e r e d b y a n

e s t a b l i s h e d c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e a r e n o t r e q u i r e d t o b e p r o d u c e d .

W e r e a m e r e c l a i m o f l e g a l p r o f e s s i o n a l p r i v i l e g e s u i f i c i e n t . t h e r e w o u l d h a v e

b e e n n o n e e d f o r t h e H i g h C o u r t l o r e f e r t h e m a t t e r b a c k l o t h e F e d e r a l C o u r t t o

d e t e n n i n e w h e t h e r p r i v i l e g e i n f a c t a t t a c h e d t o t h e d o c u m e n t s i n r e s p e c t o f w h i c h

i t w a s c l a i m e d .

2 8 . Q u i t e a p a r t f r o m t h e o r d e r s m a d e , t h e r e i s n o t h i n g i n t h e j u d g e m e n t i n Darnels

w h i c h s u g g e s t s t h a t t h e n t a k i n g o f a c l a i m i. s a s u f l l e i e n t g r o u n d t o r e b u t t h e

o b l i g a t i o n o f p r o d u c t i o n . I l i e n i a j o r i t v j u d g e m e n t s p o k e o f m a t e r i a l " i o w h i c h

l e g a l p r o f e s s i o n a l p r i v i l e g e a t t a c h e d " , n o t o f d o c u m e n t s i n r e s p e c t o f w h i c h a

c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e w a s m a d e . I n p a r a g r a p h 2 7 o f t h e j o i n t

j u d g e m e n t i t w a s s a i d :

" Daniels Corporation International Ply Ltdv ACCC (2002) 2 1 C L R 54 3 a t 54 9 [3 ] pe r Gleeso n CJ , Gaudron . (jumrau w an d Hayn e JJ .

^ Daniels Corporation International Ft)' Ltdv ACCC (2002 ) 21 3 CL R 54 3 a t 54 9 [4 ] pe r Gleeso n CJ , Gaudron , Gummo w an d Hayn e JJ . " Daniels Corporation International Pt}^ Ltdv ACCC (2002 ) 21 3 CL R 54 3 a t 54 9 [4 ] pe r Gleeso n CJ . Gaudron , Gummo w an d Hayn e JJ .

Daniels Corporation International Pty Ltdv ACCC (20(.>2 ) 21 3 CL R 54 3 a t 56 1 [37 | pe r Gleeso n CJ , Gaudron . Gummo w an d Hayn e JJ .

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Report of the Oil-for- Foot i Inquiry 8 5

Section 1 >5(2) authorised what would otherwise constitute a trespass. In that respect, it is similar to the search warrant provision m s ll.l of the Cnmes Acl 1914 (Cth) considered in Bater v Campbell and. later, in Fropemi Those decisions, which were subseciucnt to the decision in Pyneboani respectivcK' held and confirmed that the provision did not authorise the seizure ofmaterial to which legal professional pnvilege attached Given the generality of the words ofs 10 of the CrÌm…i' .Jc/ 1914 fCth) and their similarity to the words of s 155(2), it IS difficult lo see any basis upon which that subsection can be construed, consistently with Baker v Campbell and Propend. as authorising entry lo premises for the purpose of inspecting and copying material lo which legal professional pnvilege attaches.'^'

29. Tlie proper approach to the cotistruction of a statute which authorises the issue of

compulsory °jrocess requiring pri)duciion of documents in respect of which legal

professional privilege might be claimed is addressed in the majority judgement:

Legal Professional Privilege

9. It IS now settled that legal professional privilege is a rule of substantive law which may be availed of by a person lo resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dommant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings, Il may here be noted that the "dominant purpose" lest for legal professional privilege was recently adopted b)' this Court in iÓsso Australia Resources °Ml v Federal Commissioner of Taxation in place of the "sole purpose" lest which had been applied following the decision m Gran! v Downs-

11 ) Being a rule of substantive law and nol merely a rule of evidence, legal professional privilege is not confined to the processes of discover^' and in.spection and the giving of evidence m judicial proceedings. Rather and m the absence of provision to the contrary, legal professional pnvilege may be availed of to resist the giving of information or the production of documents m accordance with mvestigatoiy-procedures of the kind for which s 155 of the Act provides. Thus, for e.\ample, il was held m Baker v Campheli, that documents lo which legal professional privilege attaches could not be seized pursuant to a search warrant issued under s Kl of the Cnmes Act 1914 (Cth),

11 T.egal professional privilege is not merely a rule of substantive law. It is an important common law right or. perhaps, more accurateh', an important common law immunity It is now well settled that stalutorj- provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary' miplication to that effect. That rule, the expression of which in this Court can be traced to Potter v Minaban, was the foundation for the decision in Balcer v Campbell It is a rule which, subject to one possible exception, has been strictly applied by this Court since the decision in Re Bolton: F.x parte Beane- Cases in which it has .since been apphed mclude Bropho v tVestem .Australia. Coco V The Queen and Commissioner of .Australian I-'ederal Police v Propend Finance Pty Ltd. The possible e.xception lo the strict application of thai rule was the decision in

The Construction of the Royal Commissions .Act 1902

30. Section 2 of the .Act confers a power to issue a summons to require "a person to

appear before the Commission at a hearing", give evidence and produce

Daniets Corporation International Pty Ltd V .4CCC {2002) 213 CLR54.i at 558 [27] per Gleeson CJ, Gaudron, Gummow and Hayne ],I (emphasis added). ^ Daniels Corporation Intemationat Ply Ltd V ACCC (2fm) 213 CTR 543 al 552 - 553 |9| [11] per Gleeson CJ, Gaudron. Gummow and Hayne JJ (emphasis added)

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Report of the Oil-for-Footi Inquiry 86

d o c u m e n t s / ' a n d t o i s s u e a n o t i c e m e r e l y f o r t h e p r o d u c t i o n o f d o c u m e n t s .

S e c t i o n 2 ( 3 A ) p r o v i d e s :

. A membe r o f a Commissio n may , b y writte n notic e s e n x d (a s prescribed ) o n a person , requir e th e perso n t o produc e a documen t o r thin g specifie d i n th e notic e t o a person , an d a t th e tim e an d place , specifie d i n th e notic e "

3 1 . l l i e o b l i g a t i o n s w h i c h a r i s e o n t h e s e r v i c e o f a n o t i c e p u r s u a n t t o s 2 ( 3 . 4 ) . a n d t h e

c o n s e q u e n c e s o f a f a i l u r e l o c o m p l y w i t l i t h o s e o b l i g a t i o n s a r e c o n t a i n e d i n s

S e c t i o n 3 ( 4 ) p r o v i d e s :

. 4 perso n serve d wil h a notic e unde r subsectio n 2(3.4 ) mus t no t refus e o r fai l t o produc e a documen t o r othe r thin g tha t th e perso n wa s require d t o produc e i n accordanc e wit h th e n o t i c e "

3 2 . S e c t i o n 3 ( 5 ) p r o v i d e . s :

Subsectio n (4 ) doe s no t appl y i f th e perso n ha s a reasonabl e excuse.' '

3 3 . W h e r e a p e r s o n i s r e q u i r e d t o p r o d u c e d o c u m e n t s p u r s u a n t t o a n o t i c e u n d e r s

2 ( 3 A ) , t h e p e n a l t y f o r n o n - p r o d u c t i o n i s S i . 0 0 0 o r i m p r i s o n m e n t f o r s i x m o n t h s .

3 4 . " ' R e a s o n a b l e E x c u s e " i s d e f i n e d i n s I B t o m e a n :

I n relatio n t o an y ac t o r omissio n b y a witnes s o r a perso n summone d a s a witnes s befor e a commissio n meaa s a n excus e whic h excuse s a n ac t o r omissio n o f a simila r natur e b y a witnes s o r a perso n summone d a s a witnes s befor e a cour t o f law."* '

3 5 . I t i s t o b e n o t e d t h a t m s I B , " r e a s o n a b l e e x c u s e " r e l a t e s o n l y t o " a n ac t o r

o m i s s i o n b y a w i t n e s s o r a p e r s o n s u m m o n e d a s a w i t n e s s b e f o r e a

C o m m i s s i o n " . ' ' I t d o e s n o t , i n t e n n s , r e l a t e l o n o n - c o m p l i a n c e b y a p e r s o n s e r v e d

w i l h a s 2 ( 3 . 4 ) n o t i c e w h o i s n o t a w i t n e s s o r s u m m o n e d a s a w i t n e s s . I t m a y b e

t h a t t h e d e f i n i t i o n t h u s a p p l i e s o n l y i n r e l a t i o n t o t h e o b l i g a t i o n i m p o s e d b y s 3 ( 1 )

o r 3 ( 2 ) .

3 6 . A s a m a t t e r o f s t a t u t o r y c o n s t n i c t i o n , t h e A c t d o e s n o t n e g a t e t h e e n t i t l e m e n t l o

c l a i m l e g a l p r o f e s s i o n a l p r i v i l e g e i n r e s p e c t o f d o c u m e n t s r e q u i r e d b y s u m m o n s

o r b y n o t i c e l o b e p r o d u c e d . T h e r e a r e n o p r o v i s i o n s w h i c h e x p r e s s l y n e g a t e t h a t

p r i v i l e g e , n o r a r e t h e r e p r o v i s i o n s w h i c h a r e s u l i i c i e n t l y p l a i n t o m a k e a n y s u c h

" Royal Commissions Ad 1902 (Cth) , s 2(1 ) - (2) , " Royal Commissions Act 1902 (Cth X s 2(3.4) .

" Royal Commissions Act 1902 (Cth) , s 3 Refe r als o t o Daniels Corporation International Pt\' Ltd v ACCC (2002) 21 3 CL R 54 3 a t 55 1 [7 ] pe r Gleeso n CJ , Gaudron . Gummo w an d Hayn e J I " Roya! Commissions Act 1902 (Cth) , s 3(4) . Royal Commissions Act 1902 (Cth) . s 3|'5) .

Royal Commissions Act 1902 ( C t h i s IB . " Royal Commissions Act 1902 (Cth) , s IB .

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Report of the Oil-for- Foot i Inquiry 8 7

legislative intention apparent. Thus legal professional privilege is not abrogated

by the .^ct.

.37. Accordingly, the que.stion arises whether non-production of a document, if il was

established that the doctiment was properly the subject of a claim for legal

professional privilege, would constitute "reasonable excuse".

38. It is to be noted that s 3(4) is expressed in absolute tenns. Tlie person served

"must not refuse or fail to produce a document".^'' Tliat obligation remains in

absolute terms unless and until the provision in s 3(4) is rendered inapplicable.

Such provision is rendered inapplicable only if il is established by the recipient of

the notice, il bearing the onus of so establishing, that it has reasonable excuse for

non-production.

39. Unless and until "reasonable excuse" is established the obligation to produce

remains. It necessarily' follows that there must be a mechanism for detemtining

whether 'reasonable excuse" has been established.

Reasonable Excuse

40. Tlie expression 'Teasonable excuse" was considered by Ilely J in Bank of l'alletta

PLC V National Crime Authority.^'' .An appeal from his Honour's decision was

[36] The existence of a "reasonable excuse" is a familiar ground of exculpation from what would otherwise be the operation of a statutory prescription. Sometimes the ground of e.xculpation is expressed in terms of "lawTuI excuse" or "lawful authority". There may be a "lawful excuse" even though no "lawful authority" exists: Yin v Public Prosecutor [195''] AC 93 at 101, similarly there may be a reasonable excuse without a legal justification for the conduct in question: Poole v H'ah Min Chan (1947) 75 CLR 21 Sat 232.

[37] In Controlled Consultants Pty I.tdv Commissioner for Corporate Affairs {WH) 156 CLR 385: 57 ALR 751 the High Court considered whether the privilege against self-incrimination was a reasonable excuse for failure to produce books m response to a notice issued by the National Companies & Securities Commission. The statutory conte.xt mdicated an mtention to exclude the privilege For that reason the defence of reasonable excuse did not include the privilege against self-incrimination so far as production of books is concerned. "Reasonable excuse" (at CLR 392; ALR 755):

Royal Commissions Act 1902 (Cth), s 3(4) ''(1999) 164.'\LR45 Refer \oBank ofValetla PLC vNational Crime Autliorit}^ (1999) 90 FCR 565.

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Report of the Oil-for-Footi Inquiry 88

...I S directe d t o othe r inatters . suc h a s th e phj-sica l o r practica l difficultie s whic h ma y b e involve d i n thei r production ,

[.3S l Clearl y enough , th e referenc e t o physica l o r practica l difficultie s i n complyin g wit h th e notic e wa s illustrativ e o f matter s whic h migh t constitut e a reasonabl e excuse , rathe r tha n a descriptio n o r definitio n o f th e scop e o f th e concept . Whil e s 3 0 o f th e N C A Ac t specifie s som e matter s whic h constitut e a reasonabl e e.xcuse , an d other s whic h d o not . th e presen t proble m i s no t deal t wit h eithe r e.xpressl y o r b y implicatio n

b y th e stipulation s i n s 30 , Ther e i s a qualitativ e differenc e betwee n th e productio n o f a documen t whic h migh t imphcat e th e ban k i n som e prio r cnmina l activitj" . an d a cas e wher e th e vei y productio n o f th e document s calle d fo r b y th e notic e constitute s th e crimina l offenc e unde r foreig n law : Bratmigaii v Davison [1997 ] A( ? 23S , Soaelé Imemahonak vRogers {X'ii^) iii U S 19 7 a t 211 ,

¡39 ] Th e observation s o f Dawso n J m Corporate Affairs Commission fXSli') v i mi!

(1991 ) 17 2 CL R 31 9 a t 336 . 10 0 .AL R 60 9 tha t "reasonabl e excuse " mor e aptl y refer s t o an y physica l o r practica l difficultie s i n complyin g wit h th e notice , rathe r tha n t o lega l professiona l privilege , i s n o mor e tha n a n applicatio n o f th e poin t mad e i n Controlled Consultants I t i s no t a holding , a s counse l fo r th e responden t submitted , tha t i n legislatio n suc h a s this , exculpatio n expresse d i n term s o f reasonabl e excuse ,

i s confine d t o physica l an d practica l difficultie s i n complyin g wit h th e notice . I n an y even t th e submissio n beg s th e questio n a s t o whethe r th e fac t tha t complianc e wit h th e notic e ma y mvolv e th e ban k i n th e commissio n o f a n offenc e unde r th e law s o f Malt a i3a"pracuca l difficulty" . I n Tailaito v R (\996) 18 6 CL R 45 4 a t 464 . 13 9 AL R 386 . Ih e Hig h Cour t indicate d tha t decision s o n othe r statute s provid e n o guidanc e o n wha t constitute s reasonabl e e.xcus c m th e instan t case .

]40 ] I n Ganin v New South IVales Cnme Commission ] 1993 ] 3 2 NS WL R 42 3 Kirb y P , wit h who m Meaghe r J A an d O'Keef e AJ A agreed , speakin g o f "reasonabl e e.xcuse " (a t 436) . sai d that ,

...ther e i s ever y reaso n t o giv e th e word s use d thei r ordinar y coastructio n The y simpl y as k whethe r th e refusa l t o answe r th e questio n wa s "withou t reasonabl e excuse " ,, , I n accordanc e \Mt h orthodo x canon s o f constructio n thes e word s woul d no t b e give n a narro w meaning . The y appea r i n a provisio n whic h impose s a crimina l sanctio n fo r it s breach .

. ^ d (a t 439 ) sai d that :

I t i s undesirabl e tha t differen t formula e shoul d b e substiUite d fo r tha t whic h parliamen t ha s enacted .

Nevertheless , injudgm g whethe r a "reasonabl e excuse " exists , i t wa s clearl y appropriat e fo r th e decision-make r t o pu t ou t o f min d imaginar y an d insubstantia l fear s o r thos e which , m th e practica l world , ar e s o remot e a s t o b e safel y ignore d o r over-rule d a s unreasonabl e I n eac h case , a judgmen t mus t b e mad e

]41 ] Ganm wa s cite d b y th e majority ' i n Taikato withou t disapproval . Althoug h Dawso n J wa s i n th e mmorit y i n tha t cas e i n th e result , hi s Honou r sai d (a t CL R 470 , AL R 398) :

A reasonabl e excus e i s n o mor e o r les s tha n a n excus e whic h woul d b e accepte d b y a reasonabl e person . I t i s differen t fro m a lawfu l excuse. .

Tha t I S th e sam e notio n tha t Kirb y J wa s describin g i n Ganin I t i s als o th e notio n expresse d b y Mansfiel d (IT , m a rathe r differen t contex t i n Pascoe v Nominal Defendant (Qld) (No 2Ì [1964 [ Q d R 37 3 a t 378 :

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Report of the Oil-for- Foot i Inquiry 8 9

What is to he determined is whether the appHcant has shown any cause which can be deemed by the court to be a reasonable excuse I think this means a cause which a reasonable man would regard as an excuse, a cause

consistent with a reasonable standard of conduct.,

|42| Thus while a reasonable excuse would include any current legal right to resist the compulsory production of documents, it is not confined lo cases m which the resistance is on the ba.sis of some right pnvilege or immunity recogmsed by the general law Nor is it neces.sarily confined to physical or practical difficulties in complying with the notice. It includes any excuse which would be accepted by a reasonable person as sufficient to justify non-compliance with a notice lawfully issued by NCA, but bearing in mind the central role that such notices play in the di.schargc by NCA of ils statutory funcUons.

[43] Branmgan v Davison [1997] AC 238 is a decision of the Privy Council, on appeal from New Zealand, in a situation which. In some respects, is similar to the present There a Commission of Inquiry in New Zealand required the plaintiffs, who were citizens and residents of New Zealand, but who also practised as chartered accountants in the Cook Islands, to give evidence to the inquiry, about matters involving the Cook Islands, when the giving of that evidence was likely to render them liable lo proscculion in the Cook Islands pursuant to that country's secrecy legislation That legislation was enacted to promote the attractions of the Cook Islands as a tax haven The New Zealand legislation under which the Commission of Inquiry operated preserved the privilege against self-incrimination- Under that legislation, a refusal to answer questions, to be punishable, must be "without sufficient causc" or without offering any "ju-st excuse"

[44J The Privy Council held that:

" The common law privilege against self-lncrim Ination does not run when the criminal or penal sanctions arise under a foreign law That is because, having regard to the absolute nature of the privilege where it exists, the clTect of Its recognition would be to give primacy to the foreign law. That would be an unacceptable encroachment on the domestic countr>''s

legitimate interest in the conduct of Its own judicial (and presumably, inquisitorial) proceedings.

" By the same process of reasonmg the privilege does not run where the feared criminality under the foreign law. lies not in the previous conduct of the plamtiffs, but in the fact of them giving e\'idence to the Commission of what they know of the transactions which involved the Cook Islands

" If the unqualified application of the privilege to foreigji law is

unsatisfactory, so also is the opposite extreme. The opposite extreme is that the prospect of punishmem under foreign law is neither here nor there. This would be a harsh attitude which would be a reproach to any legal system

" I'he "sufficient cause" and "just e.xcusc" exceptions (which are synonymous) provide ample scope for all the circumstances to be taken mto account-Inherent in those expressions is the concept of weighing all the

consequences of the refusal to give evidence: the adverse consequences to the inquiry if the questions are not answered, and the adverse consequences to the witness if he is compelled to answer.

" It was a matter for the Commissioner to determine whether the stamtory exceptions were applicable. .Although he misdirected himself on that que.stion he also conducted the weighing exercise which the Privy Council considered to be appropriate He held that the justification for compelling

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Report of the Oil-for-Footi Inquiry 90

th e plaintiff s t o giv e evidenc e i n Ne w Zealan d wa s s o stron g tha t n o balancin g consideration s unde r th e foreig n Stat e compulsio n prmcipl e coul d lea d t o thei r bem g allowe d t o refus e t o giv e evidenc e Tha t decisio n wa s unassailabl e

[45 ] Thei r Lordship s note d (a t 253 E ) a n acceptanc e o n th e par t o f th e Commissio n tha t th e fir m o f accountant s coul d no t reasonabl y h e expecte d l o produc e document s currentl y locate d i n th e Cool : Islands ,

[46 ] Th e Priv y Counci l m Brannigan allowe d a muc h broade r scope , i n th e statutor y contex t ther e unde r consideration , fo r th e notio n o f "reasonabl e excuse" , o r equivalen t expressions , tha n di d th e Ne w Sout h Wale s Cour t o f Appea l i n Australian Securities Commission v Ampolex Ltd [1995 ] 3 S NS WL R 504 , i n th e contex t o f th e Australian Securities Commission Act 198 9 (Cth ) (" AS C Act") , I n Ampolex th e

existenc e o f a n undertakm g t o di e Cour t t o protec t th e confidentialit y o f document s wa s no t regarde d a s a reasonabl e excus e fo r no t complyin g wit h a notic e whic h require d thei r production . Th e KC.' ^ .^c t differ s fro m th e ASC Act . an d

correspondin g provision s commonl y foun d m companie s legislation , m a s muc h a s th e N C A Ac t allow s th e recipien t o f a notic e t o clai m t o th e perso n t o who m h e i s require d t o produc e th e document s tha t h e i s entitle d t o refus e production : s 29(5) . A n advers e decisio n o n tha t clai m i s th e subjec t o f a n interna l merit s revie w ( s 32(l)(b)) , an d t o judicia l revie w s 32(2) . Th e natur e an d exten t o f th e provision s fo r determinin g a n allege d entitlemen t t o refus e t o produc e documents , particularl y th e interna l review , suggest s tha t th e notio n o f "reasonabl e excuse " ma y b e broade r tha n commo n la w privilege s t o th e exten t tha t the y ar e preserve d b y s 30 , an d physica l o r practica l difficultie s i n producin g th e document s calle d fo r b y th e notice , particularl y i f "practical " difficultie s i s use d i n a narro w sens e

[47 ] I d o no t thin k tha t I a m boun d b y th e decision s o f th e Hig h Cour t t o whic h I hav e referre d t o find , o r tha t I shoul d otherwis e find , tha t th e structur e o f th e NC A Ac t i s suc h tha t "reasonabl e excuse " i s confine d t o physica l excus e (fo r example , document s canno t b e foun d o r insufficien t tim e allowed ) an d th e specifi c categorie s o f lega l excus e referre d l o i n s 30 . T o th e exten t t o whic h th e structur e o f th e N C A Ac t provide s guidanc e o n th e question , i t point s i n a differen t direction . Th e

resul t i s tha t a valu e judgmen t ha s t o b e mad e m th e circumstance s o f eac h individua l case , a s t o whethe r th e recipien t o f th e notic e ha s a reasonabl e excuse , i n th e sens e tha t thi s terr a i s ordmaril y understood , fo r no t producin g th e document s m questio n I f th e rang e o f factor s whic h ma y b e take n mt o accoun t m makin g tha i judgmen t i s a s th e Priv y Counci l suggests , no t al l o f the m ma y b e know n t o th e recipien t o f th e notic e a t th e tim e whe n productio n o f th e document s i s calle d for , an d eac h cas e ma y b e highl y sensitiv e t o it s ow n facts . However , I shoul d follo w th e decisio n o f th e Priv y Council , whic h involve s th e makin g o f a n objectiv e determinatio n a s t o th e existenc e o r otherwis e o f a reasonabl e e.xcuse," "

4 1 . I r e s p e c t f u l l y a g r e e w i t h t h i s a n a l y s i s . I s e e n o r e a s o n w h y a n e s t a b l i s h e d c l a i m

f o r l e g a l p r o f e s s i o n a l p r i v i l e g e s h o u l d n o t b e c o n s i d e r e d a " r e a s o n a b l e e x c u s e " f o r

n e g a t i o n o f t h e o b l i g a t i o n t o p r o d u c e d o c u m e n t s b e c a u s e o f t h e o p e r a t i o n o f s 3 ( 5 )

s o a s t o d e n y t h e o p e r a t i o n o f s 3 ( 4 ) i n r e s p e c t o f t h o s e d o c u m e n t s l o w h i c h t h e

c l a i m i s e s t a b l i s h e d .

Banic ofValetta PLC v National Crime Authori^ (1999 ) 16 4 AL R 4 5 a t 5 3 - 5 7 pe r Hel y .1 ,

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Report of the Oil-for- Foot i Inquiry 91

4 2 . T l i c d e f i n i t i o n o f " r e a s o n a b l e e . x c u s e " i n s I B r e l a t e s o n l y t o " a n y a c t o r o n i i s s i o n

b y a w i t n e s s o r a p e r s o n s t i m n i o n e d a s a w i t n e s s b e f o r e a C o m m i s s i o n " . ' " I n

t e r m s , i t w o u l d n o t a p p e a r t o a p p l y t o o b l i g a t i o n s l l o w i n g f r o m t h e s e r v i c e o f a

n o t i c e p t i r s u a n t t o s 2 ( 3 . 4 ) . T l i a t d o e s n o t m e a n , h o w e v e r , a s a m a t t e r o f s t a t u t o r v

c o n s t n i c t i o n . tha t w h e r e t h e e x p r e s s i o n " r e a s o n a b l e e x c u s e " i s u s e d i n s 3 ( 5 ) . i t

s h o u l d n o t b e g i v e n e i t h e r t h e m e a n i n g r e f e r r e d t o i n t h e d e f i n i t i o n s e c t i o n , o r

i n d e e d a w i d e r m e a n i n g . .A n e s t a b l i s h e d c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e

w o u l d e x c u s e n o n - p r o d u c t i o n o f d o c u m e n t s i f a w i t n e s s w a s s u m m o n s e d t o

p r o d u c e s u c h d o c u m e n t s b e f o r e a c o u r t o f l a w . .A n e s t a b l i s h e d c l a i m t o l e g a l

p r o f e s s i o n a l p r i v i l e g e e q u a l l y w o u l d c o n s t i t u t e a " r e a s o n a b l e e x c u s e " f o r n o t

p r o d u c i n g d o c u m e n t s o t h e r w i s e t h e s u b j e c t o f a n o t i c e i s s u e d p u r s u a n t l o s 2 ( 3 A ) .

B y Who m i s ' Rea.sonabi c Excuse ' Determine d

4 3 . T l i e r e r e m a i n s t h e q u e s t i o n o f b y w h o m t h e e x i s t e n c e o f a " r e a s o n a b l e e x c u s e " i s

t o b e d e t e m i i n e d . . A W B h a s s u b m i t t e d t h a t i t c a n b e d e t e r m i n e d o n l y b y a b o d \

c . s e r c i s i i i g a .judicia l p o w e r , h e r e r e l e v a n t l y t h e F e d e r a l C o u r t . N o r e a s o n w h y a

b o d \ s u c h a s a R o y a l C o m m i s s i o n e x e r c i s i n g t h e e x e c u t i v e p o w e r c o u l d n o t

r e s o l v e s u c h a n i s s u e w a s a d v a n c e d . O f c o u r s e , a n y d e c i s i o n b y a b o d y s u c h a s a

R o y a l C o m m i s s i o n e r e . x e r c i s i n g t h e e x e c u t i v e p o w e r w o u l d n o t b e final, a n d

w o u l d b e s u b j e c t t o r e v i e w e i t h e r p u r s u a n t t o t h e Administrative Decisions

(Judicial Review} Act 1977or s 39 B o f th e Judiciary Act 1903.

4 4 . I t i s b e y o n d d o u b t tha t t h e o n u s o f e s t a b l i s h i n g t h e c l a i m f o r l e g a l p r o f e s s i o n a l

p r i v i l e g e lie s o n t h e p a r t y a s s e r t i n g it . T l i a t i s s o a s a m a t t e r o f c o n s t r u c t i o n o f s

3 ( 4 ) a n d ( 5 ) o f t h e . Act . a n d a u t h o r i t y . I n National Crime Authority v S/' t h e F u l l

C o u r t o f t h e F e d e r a l C o u r t h e l d t h a t i t w a s f o r t h e p a r t y a s s e r t i n g o r c l a i m i n g l e g a l

p r o f e s s i o n a l p n v i l e g e t o e s t a b l i s h t h e f a c t s g i v i n g r i s e t o it . I n s o d o i n g t h e F u l l

C o u r t f o l l o w e d t h e d e c i s i o n i n Grant v Downs."''' T h e d e c i s i o n t u n i e d u p o n t h e

c o n s t r u c t i o n o f t h e National Crime Authority Act 1984 ( C t h ) . f h e F u l l C o u r t h e l d

t h a t s 2 8 o f t h a t A c t e m p o w e r e d t h e A u t h o r i t y t o s u m m o n a w i t n e s s t o g i v e

e v i d e n c e a n d p r o d u c e d o c u m e n t s . S e c t i o n 2 8 o f t h e .Ac t r e q u i r e d t h a t a p e r s o n

Royal Commissions Act 1902 (Cth) . s IB . " ( 1 9 9 1 ) lot ) AL R 151 . '"(igTô ) 13 5 a . R 6 7 4

Pag e I S

99 Report of the Oil-for-Food Inqtiir} /

s c n e d w i l h a s i m i i n o n s s h a l l n o t " w i t h o u t r e a s o n a b l e e x c u s e " fai l t o a t t e n d .

S e c t i o n .10(2 ) p r o v i d e d :

a perso n appeann g a s a witnes s a t a hearin g befor e th e authoritie s shal l n o t withou t reasonabl e e.xcus e

c . refus e o r fai l l o produc e a documen t o r thin g tha t h e wa s require d t o produc e h y a summon s unde r thi s Ac l serve d o n hi m a s prescribed .

4 5 . B y s 3 2 t h e . A u t h o r i t y w a s r e q u i r e d , w h e r e a p e r s o n c l a i t n e d t o b e e n t i t l e d t o

r e f u s e t o f u r n i s h i n f o m i a t i o n o r p r o d u c e d o c u m e n t s t o i t u n d e r v a r i o u s s e c t i o n s , t o

d e c i d e a s s o o n a s p r a c t i c a l w h e t h e r i n it s o p i n i o n t h e c l a i m i s j u s t i f i e d , a n d n o t i f y

t h e p e r s o n o f i t s d e c i s i o n . Tli e p e r s o n , i f d i s s a t i s f i e d , c o u l d a p p l y t o t h e F e d e r a l

C o u r t f o r a r e v i e w o f t h e d e c i s i o n p u r s u a n t l o s 3 2 ( 2 ) o f t h e Nalional Crime

Authonty Act ¡984!^-

4 6 . W h i l s t t h e c o u r t w a s c o n s i d e r i n g a s t a t u t o r v ' r e g i m e u n d e r t h e National Crime

Authority Act ¡984. t h e . A u t h o r i t y w a s n o t a j u d i c i a l b o d y . L o c k b a r t . 1 s a i d :

Whe n question s o f lega l professiona l privileg e aris e i s proceedmg s befor e court s ther e ar e wel l establishe d procedure s fo r dealin g wit h the m Th e clai m i s asserte d o n oat h an d i l i s ope n t o th e cour t o r th e perso n wh o seek s acces s l o th e documen t o r th e answe r t o th e questio n t o cross-examin e th e perso n wh o make s th e claim . Th e e.xten t t o whic h th e cour t allow s cross -e.xaminatio n o r itsel f ask s question s o f th e deponen t is . o f course , a matte r fo r th e discretio n o f th e judge : bu t generall y i t canno t b e sufficien t fo r someon e merel y t o asser t tha t th e disclosur e o f th e identit y o f a perso n o r o f a documenl , o r o f th e numbe r o f person s wh o wer e presen t a t a meeting , o r w h o w^a s presen t a t th e meeting , o r wh o o n behal f o f th e clien t (i f th e perso n make s th e assertio n i s a solicitor ) spok e t o hi m o r tha t h e spok e l o a jiarlicula r office r o f th e clien t l o enhvc n a clai m o f lega l professiona l privilege .

Wha t S di d i n thi s cas e wa s simpl y t o mak e a bal d assenio n tha t l o answe r ccrtai n question s o r t o identif y particula r document s woul d b e t o disclos e matter s whic h woul d revea l privilege d communications . Bu t i f a n assertio n o f thi s kin d i s mad e unde r oat h ho w ca n i t b e tested , shor t o f requirin g th e question s t o b e answere d o r th e document s disclosed ? S wa s i n imt h performin g th e functio n o f th e Authorit y becau-s e h e dre w th e conclusio n whic h i l wa s fo r th e .A.uthorit y t o reac h i f materia l ha d bee n pu t befor e i t fro m whic h i t coul d hav e draw n a conclusio n a s t o whethe r lega l professiona l privileg e wa s corrcctl y raised . Bu t th e materia l l o establis h th e validit y o f th e clai m wa s neve r place d befor e th e Authority , I t i s no t sufficien t fo r tli e per.so n assertin g th e clai m t o merel y asser t il : or , a s Bret t T.. I sai d i n Gardner v In'in (187S ) 4 F. X D 4 9 a t 52 , l o hav e a "skeleton" .

I f S wishe d t o mak e goo d hi s clai m t o refus e t o answe r quesuon s o r produc e documents , i t wa s fo r hi m t o lea d th e requisit e materia l s o tha t th e Authorit y coul d conside r it s altitud e an d e.xamin e hi m wit h respec t t o it . Th e procedur e tha t shoul d b e adopte d befor e th e Authorit y i s aki n l o a voir dire examination , wher e onc e th e clai m fo r privileg e i s asserted , i t i s fo r th e perso n assertin g i t l o lea d hi s evidenc e o r mak e submission s i n suppor t o f hi s clai m an d fo r intereste d partie s o r th e tribuna l t o les t i t b y cros s exammalio n o r othe r evidence , Al th e conclusio n o f voir dire examinatio n th e tnbuna l woul d the n hav e befor e i t th e materia l t o enabl e i t t o mak e a decisio n a s t o th e correctnes s o f th e claim . Thi s procedur e wa s no t followe d here , doubtles s becaus e o f th e natur e o f th e clai m itsel f whic h wa s inseparabl y associate d wit h th e conclusio n o f couase l fo r S tha t sub- s (3 ) o f s 3 0 extende d privileg e t o th e

mer e fac t o f th e communication , a n erroneou s submission .

- National Crime Auihonty V S {\99\) 10 0 AL R 15 1 a t 15 6 pe r LockhartJ ,

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Report of the Oil-for- Foot i Inquiry 9 3

Th e clai m fo r privileg e asserte d b y th e responden t befor e th e Authorit y wa s a bar e o r skeleta l clai m unsupporte d b y an y evidenc e whic h woul d hav e enable d i t t o asse s th e corrccmes s o f th e clai m Face d wil h a bar e assertio n o f privileg e b y S , i l i s dilficul t t o kno w wha l counse l assistin g th e Authorit y coul d hav e aske d hi m o r wha t evidenc e i t coul d hav e le d t o tes t o r

refut e th e correctnes s o f th e clai m shor t o f disclosin g t o th e Authorit y th e materia l fo r whic h confidentialit y wa s claimed.'" '

4 7 . W h i l s t t h e C o u r t w a s c o n s i d e r i n g a statuton, - r e g i i n e w h i c h e x p l i c i t l y r e q u i r e d t h e

A u t h o r i t y l o d e t e n n i n e a c l a i m f o r l e g a l p r o t ' e s s i o n a l p r i \ ' i l e g e , t h a t v e r y s t a t u t o r \

r e g i m e i s i n d i c a t i v e tha t t h e P a r l i a m e n t h a s i n d i c a t e d t h a t , i n a p p r o p r i a t e

c i r c u m s t a n c e s , a c l a i m f o r l e g a l p r o f e s s i o n a l p n v i l e g e m a y b e d e c i d e d b y a n o n -

j u d i c i a l b o d y , s u b j e c t t o a p p e a l t o t h e F e d e r a l C o u r t

4 8 . I s e e n o r e a s o n i n p r i n c i p l e w h y a R o y a l C o m m i s s i o n e r , f r e q u e n t l y a f o m i e r

j u d i c i a l o l l l c e r o r e x p e r i e n c e d l e g a l p r a c t i t i o n e r , s h o u l d n o t r e s o l v e a c l a i m f o r

l e g a l p r o f e s s i o n a l p r i v i l e g e .

49 . I n Baker v Campbell Maso n J wrote :

Whe n w e mov e beyon d th e aren a o f curia l proceeding s t o th e real m o f administrativ e an d investigator y procedure s th e desirabilit y o f preser \ in g th e confidentialit y o f lawyer-clien t communication s i s no t oppose d b y th e publi c Interes t m facilitatin g th e productio n o f relevan t material s i n litigation , e.xcep t m thos e case s (a ) i n whic h th e investigator} ' procedure s ar e designe d a s a preliminar) ' t o litigation , an d (b ) i n whic h th e disclosur e o f th e communication s i n th e administrativ e o r Investigator y procedure s woul d impai r th e e.xercis e o f th e privileg e i n pendin g o r fumr e litigatio n However , othe r countervailin g consideration s the n arise . Th e natur e an d forc e o f thos e consideration s depen d o n th e objec t an d purpos e o f th e procedure s fo r whic h th e relevan t statut e make s provision . Bu t i t ma y b e deduce d fro m th e ver y existenc e o f th e statutor y obligatio n t o answe r questions , provid e informatio n o r produc e document s tha t ther e i s a stron g publi c interes t i n obtainin g th e material s th e provisio n o f whic h i s th e objec t o f th e statut e

Quit e apar t fro m th e forc e o f thes e consideration s ther e i s th e proble m whic h 1 mentione d i n O 'Reilly an d Brcnna n J referre d t o i n Pyneboard Pty Limited v Trade Practices

Commission tha t o f imposin g upo n unqualifie d person s th e tas k o f decidin g difficul t question s o f lega l professiona l privilege . Thei r decisio n o f suc h a questio n woul d no t b e conclusiv e A decisio n o f a cour t (a ) o n a prosecutio n fo r contraventio n o f th e statutor y obligation , o r (b ) i n proceeding s fo r a declaratio n a s t o th e existenc e o f th e pnvilege , woul d b e require d i n orde r t o provid e a conclusiv e answer -I n thi s respec t i l i s scarcel y t o b e suppose d tha t Parliament , whe n i t impose s th e obligatio n t o furnis h infomiation , mtend s tha t i n th e cours e o f a n administrativ e inquir y o r investigatio n i t shoul d b e delaye d o r interrupte d b y th e necessit y l o obtai n a fina l decisio n o f a cour t o n th e questio n whethe r a clai m o f lega l professiona l privileg e ca n b e sastaine d i n relatio n t o a particula r answe r o r particula r document s This , o f course , woul d b e relevan t t o th e existenc e o f a statutor y intentio n t o abrogat e th e privilege , assumin g i t l o h e otherwis e inherentl y available . Nonetheless , i l i s a materia l facto r t o b e considere d i n decidin g whethe r th e privileg e i s capabl e o f bein g claime d m administrativ e o r investigator y procedure s Th e determinatio n o f a clai m o f privileg e m cuna l proceeding s stand s m shar p contra.s l becaus e i t entail s n o simila r dela y o r interruption.'' ®

National Crime Authonly v S (1991 ) 10 0 A L R 15 1 a t 15 9 - 16 0 pe r Lockhar t J Refe r t o s 32(1 ) an d (2 ) o f th e National Crime Authority Act 1984 (Cth) , ® Baker Y Campbell (1983 ) 15 3 CL R 5 2 a t 7 5 - 7 6 pe r Maso n J .

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9 4 Report of the Oil-for-Food biqitirif

50 . . Altliougl i Ma-so n . 1 w a s a d d r e s s i n g t h e i s s u e o f w h e t h e r l e g a l p r o f e s s i o n a l

p r i v i l e g e e x t e n d e d b e y o n d ciiria l o r s e i n i - e u r i a l p r o c e e d i n g s , h i s w o r d s a r e

a p p o s i t e . I r e s p e c t f u l h a g r e e t h a t , w h e r e t h e , \ e t r e t a i n s t h e d o c t r i n e o f l e g a l

p r o f e s s i o n a l p r i v i l e g e i n r e l a t i o n t o t h e p r o d u c t i o n o f d o c u m e n t s , a n d

c o n t e m p l a t e s t h a t a p a r t y c l a i m i n g i t b e a r s t h e o n u s o f e s t a b l i . s h i n g t h a t p r i v i l e g e

s o a s t o n e g a t e t h e o b l i g a t i o n t o prt^duc e d o c u m e n t s o t h e r \ s i s e c a u g h t b y a n o t i c e ,

t h e l e g i s l a t u r e w o u l d n o t h a \ e c o n t e m p l a t e d t h a t tli e c o u r s e o f t h e in v e s t i g a t i o n

m u s t c e a s e u n t i l t h e r e i s a f i n a l d e t e r m i n a t i o n b y a c o u r t o f t h a t c l a i m . I f t h a t v i e w

b e c o r r e c t , a n d i n m y o p i n i o n i t is , i t n e c e s s a r i l y m e a n s t h a t t h e c l a i m f o r l e g a l

p r o f e s s i o n a l p r i v i l e g e s l i o u l d b e m a d e b e f o r e t h e p e r s o n e x e r c i s i n g t h e p o v \ e r s

u n d e r t h e .Act . I f i l i s n o t s u s t a i n e d , t h e p r o d u c i n g p a r t y h a s r i g h t s o f r e v i e w . I f i t

i s s u s t a i n e d t h e p r o c e s s e s o f t h e R o y a l C o m m i s s i o n continue.''' ^

51 . T l i e c o n s e q u e n c e o f t h e v i e w o f M a s o n . 1 i s tha t a R o y a l C o m m i s s i o n e r h a s t h e

p o w e r t o r e c e i v e , c o n s i d e r a n d d e t e n n i n e t h e c l a i m s f o r l e g a l p r o f e s s i o n a l

p r i v i l e g e i n r e s p e c t o f d o c u m e n t s t h e s u b jec t o f it s n o t i c e .

52 . l l i e a l t e m a t i v e w o u l d b e e x t r a o r d i n a r y 1 1 w a s c o n t e n d e d t h a t a R o y a l

C o m m i s s i o n e r h a d n o s u c h p o w e r . I t w a s s a i d t h a t , w h e n a c l a i m o f l e g a l

p r o f e s s i o n a l p r i v i l e g e i s m a d e , i f t h e C o m m i s s i o n w i s h e d t o c h a l l e n g e t h a t c l a i m ,

i t s h o u l d r e q u i r e p r o d u c t i o n o f t h e d o c u m e n t , w i t h t h e p a r t y a d v e r s e l y a l l e c t e d

t h e n h a v i n g i h e o b l i g a t i o n t o a p p r o a c h t h e F e d e r a l C o u r t t o r e s i s t t h a t c l a i m I d o

n o t t h i n k t h e l e g i s l a t u r e c o u l d h a v e i n t e n d e d t h a t a R o y a l C o m m i s s i o n e r s h o u l d b e

o b l i g e d t o r e q u i r e p r o d u c t i o n o f a d o c u m e n t i n r e s p e c t o f w h i c h l e g a l p r o f e s s i o n a l

p r i v i l e g e w a s c l a i m e d w i t h o u t k n o w i n g t h e d e t a i l s o r b a s i s o f t h a t c l a i m , a n d

c o n s i d e r i n g f o r l i i n i s e l f o r h e r s e l f w h e t h e r i t s h o u l d b e u p h e l d . R o y a l

C o m m i s s i o n s a r e n o r m a l l y e s t a b l i s h e d t o c o n s i d e r m a t t e r s w h i c h t h e E x e c u t i v e

G o v e m m e n t r e g a r d s a s m a t t e r s o f i m p o r t a n c e , f h e r e i s n o n n a l l y a d a t e i n t h e

L e t t e r s P a t e n t b y w h i c h t h e R o y a l C o m m i s s i o n e r m u s t r e p o r t . P u b l i c m o n i e s a r e

e . x p e n d e d i n c o n d u c t i n g s u c h a C o m m i s s i o n . I d o n o t t h i n k t h a t t h e l e g i s l a t u r e

I t i s t o b e note d tha t i n Branmgan y Davison 11997 ] A C 2.^8 . note d b y Hel y J . th e Priv y Counci l held , whe n considerin g th e positio n i n regar d t o a Ne w Zealan d Commissio n o f Inquiry ' tha t i t wa s fo r th e Commissione r t o determin e whethe r th e statutoi} ' exceptio n t o th e requiremen t t o produc e wa s applicable . However , s 1 3 o f th e Ne w 7,eahnd Commissions of Inquiiy .-ict 1908 conferre d upo n a Commissioner , wh o wa s a judg e o r forme r judg e o f th e Hig h Court , th e sam e power s a s ar e possesse d b y a judg e o f th e Hig h Cour t i n th e exercis e o f hi s o r he r civi l jurisdictio n unde r th e Judicatur e Ac t

1908 .

Pag e 2 1

Report of the Oil-for- Foot i Inquiry 9 5

could have contemplated such a clumsy or practically unworkable circumstance as

to require, first, a Royal Commissioner to make a determination to require

production of the docunient without considering the basis for the claim (for if the

Commissioner has no power to detennine t!ie claim, he nitLst h a \e no power to

consider it), and second, to require every claim for legal professional privilege to

be determined hy a separate body, namely the Federal Court.

5.3. Tliere is nothing in the Act which suggests that the apphcability of s 3(5) is to be

detennined in the first instance, otherwise than by the Royal Commissioner. It is

to be bonie in mind that subs 5 may render subs 4 inapplicable if there is a

"reasonable excuse" for non-production of documents, which reasonable excuse

m ay include matters other th;m claims for legal professional privilege. Physical

diiiÔculty of production m ay be a reasonable excuse."" Tliere is no reason why a

Roy al Commissioner should not detennine whether as a matter of fact, physical

difliculty of production constitutes a reasonable e.xcuse. If "rea.sonable excuse"

encompasses matters which a Royal Commissioner is plainly capable of deciding,

it becomes difficult to understand how one limits the power to make the

detennination required by s 3(5) merely because other grounds for making that

detennination may be more difficult, or involve consideration of legal principles.

Incidental or Anciilan Power

54. It is well established that:

authority conferred by statute is construed as authorising everything which can fairly be regarded as incidental to or consequential upon the authority itself"

55. No narrow approach is taken in detcnnming such incidental or consequential

power. In Re Northern Ireland Human Rights Commission.'^ in the speech of

Lord Hutton, the passage in W a de and Forsyth on Administrative I.avv (s"" Ed at

page 219) was approved:

A statutory power will be con.strued as impliedly authorising everythmg which can fairly be regarded as incidental or consequential to the power itself: and this doctrmc is not applied narrowly

.And later:

Dank ofFalella vNational Cnme Authority ( m \) 164 ALR 45 at 55 per Hely J. Johns V Australian Securities Commission (\99i) 178 CLR 408 at 428-9 per Brennan J " [2002] flKHI. 25.

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Report of the Oil-for-Footi Inquiry 96

Stamion - power s therefor e hav e considerabl e latitude , an d b y reasonabl e constructio n th e court s ca n softe n th e rigou r o f th e ultr a vire s principl e Althoug h thi s boo k contain s man y instance s o f tha t principl e bein g infringed , i t mus t b e remembere d tha t th e court s interven e onl y wher e th e thin g don e goe s beyon d wha t ca n fairl y b e treate d a s incidenta l o r consequential.' ^

56 . I n m y o p i n i o n w h e r e t h e l e g i s l a t u r e h a s c o n f e r r e d u p o n a R o y a l C o m m i s s i o n t h e

p o w e r l o i s s u e a s u m m o n s r e q u i r i n g t h e c o m p u l s o r > ' p r o d u c t i o n o f d o c u m e n t s t o

t h e C o m m i s s i o n , o r a p e r s o n n o m i n a t e d b y it . a n d w h e r e t h e s t a t u t e f u r t h e r

p r o v i d e s t h a t a p e r s o n m a y e s t a b l i s h a " r e a s o n a b l e e x c u s e " f o r n o t s o p r o d u c i n g

t h e d o c u m e n t s , t h a t r e a s o n a b l e e x c u s e n e g a t i n g t h e o b l i g a t i o n o f p r o d u c t i o n , t h e

l e g i s l a t u r e h a s c o n f e i r e d u p o n t h e R o y a l C o n u n i s s i o n e r t h e p o w e r t o d e c i d e

w h e t h e r t h e c l a i m o f r e a s o n a b l e e x c u s e f o r n o n - p r o d u c t i o n i s e s t a b h s h e d . T h e r e

i s n o t h i n g i n t h e s t a t u t e w h i c h s u g g e s t s t h e contrarv' . T l i e i n c o n v e n i e n c e , d e l a y

a n d e x p e n s e o f a n y a l t e m a t i v e s y s t e m o f r e s o l u l i o n o f t h e c l a i t n o f " r e a s o n a b l e

e x c u s e " i s o b v i o u s . I n n i y v i e w , i t c t u i n o l b e t h o u g h t t h a t t h e P a r l i a m e n t i n t e n d e d

t o r e q u i r e t h a t a p e r s o n s e r v e d w i l h a n o t i c e p u r s u a n t t o s 2 ( 3 A ) o f t h e .Ac t w a s

r e q u i r e d i n e \ e r y i n s t a n c e t o a p p r o a c h a c o u r t f o r a d e t e m i i n a t i o n w h e t h e r i t h a d

' r e a s o n a b l e e x c u s e " f o r n o n - p r o d u c t i o n s o a s t o n e g a t e t h e o b l i g a t i o n o t h e r w i s e

i m p o s e d b y s 2 ( 4 ) .

5 7 . I t f o l l o w s , i n m y v i e w , t h a t a C o m m i s s i o n e r e . x e r c i s i n g t h e p o w e r s u n d e r t h e .Act .

h a s a u t h o r i t y t o i s s u e a s u m m o n s w h i c h e n c o m p a s s e s d o c u m e n t s w h i c h , a f t e r

s e r v i c e , m a y g i v e r i s e t o a c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e i n r e s p e e l o f s o m e

b u t n o t al l o f t h e d o c u m e n t s , a n d t o h e a r a n d d e t e r m i n e t h a t c l a i m f o r l e g a l

p r o f e s s i o n a l p r i v i l e g e s o a s t o d e t e n n i n e w h e t h e r t h e p r o v i s i o n s o f s 3 ( 5 ) a p p l y s o

a s t o n e g a t e t h e o b l i g a t i o n o f p r o d t t c t i o n . I s e e n o r e a s o n w h y p r o c e d u r e s s u c h a s

t h e p l a c i n g o f t h e d o c u m e n t s i n a s e a l e d e n v e l o p e a n d p r o d u c i n g t h e m t o t h e

R o y a l C o m m i s s i o n e r p e n d i n g d e t e n n i n a t i o n o f t h e c l a i m s h o u l d n o t b e a v a i l e d o f .

T l i e n e e d t o e s t a b l i s h a p r o c e s s t o p e n n i t t h i s t o h a p p e n d o e s n o t n e g a t e t h e p o w e r

c o i i l ' e r r e d b y t h e s t a t u t e \ \ h e n p r o p e r l y c o n s t n t c d ,

58 . I n t h e r e p o r t o f t h e M I H R o y a l C o m m i s s i o n , t h e R o y a l C o m m i s s i o n e r . J u s t i c e

O w e n , w r o t e :

I t i s no t s o clea r whethe r a clai m fo r lega l professiona l privileg e wil l constitut e a reasonabl e excus e agains t productio n i n answe r t o a commissio n summon s o r notice . Unlik e th e privilege s agains t self-incrimmatio n an d self-exposur e t o a penalty , lega l professiona l

" Re Northern Ireland Human Rights Commission [2002 ] UKII L 2 5 a t [57 | pe r Lor d Ilutto n

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Report of the Oil-for- Foot i Inquiry 97

privileg e i s no t specificall y deal t wit h b y th e Act . O n firs t consideration , i t ma y see m od d that , althoug h individual s ma y no t avai l themselve s o f th e privilege s agams t self-incriminatio n o r self-e.\po3ur e t o a penalty , the y ma y rel y o n lega l professiona l privileg e t o withhol d document s fro m productio n I t migh t b e observed , however , tha t thi s i s th e positio n tha t no w pertain s m relatio n t o th e productio n o f document s t o th e .-Australia n Competitio n an d Consume r Commissio n unde r s i 5 5 o f th e Trade Practices Act 1974.

I t i s wel l accepte d tha t statutory - provision s ar e no t t o b e construe d a s abrogatin g importan t coinnio n la w privilcges-suc h a s lega l professiona l pnvtlege- m th e absenc e o f clea r ward s o r a necessarj ' implicatio n t o tha t effect . I t remain s a n unresolve d matte r o f constructio n whethe r th e provision s o f th e Royal Commissions Act 1902 necessaril y impl y th e abrogation , o r perhap s partia l abrogation , o f lega l professiona l privileg e Th e Commissio n di d no t conside r

I t necessar y T O resolv e th e questio n o f constructio n o r t o rul e formall y o n an y claim s fo r lega l professiona l privilege . I n th e event , eithe r claim s wer e no t presse d o r th e Commissio n di d no t requir e productio n o f document s o r part s o f document s ove r whic h a clai m fo r lega l professiona l privileg e ha d bee n mad e "

5 9 . I t i s t o b e n o t e d t h a t H i s H o n o u r r a i s e d n o d o u b t c o n c e r n i n g t h e c a p a c i t y o f a

R o y a l C o m m i s s i o n e r t o r e s o l v e c l a i m s f o r l e g a l p r o f e s s i o n a l p r i v i l e g e . "

6 0 . T h e p r o c e d u r e s a n d p r o c e s s e s o f a R o y a l C o m m i s s i o n a r e m u c h m o r e f l e x i b l e a n d

a d a p t a b l e t h a n t h o s e i n a c o u r t . T h e r e a r e n o r e g u l a t o r y r u l e s , o r f i x e d r u l e s o f

p r o c e d u r e . R o y a l C o m m i s s i o n e r s u s u a l l y i s s u e a p r a c t i c e n o t e t o p r e s c r i b e

p r o c e d u r e s t o b e f o l l o w e d i n t h e c o n d u c t o f t h e i n q u i r y b u t s u c h p r a c t i c e n o t e s a r e

i n h e r e n t l y l i a b l e t o a m e n d m e n t o r w a i v e r d e p e n d i n g u p o n t h e e x i g e n c i e s o f t h e

i n q u i r y .

6 1 . T l i e r e i s t h u s n o d i f f i c u l t y i n p r e s c r i b i n g a p r o c e s s t o a c c o m m o d a t e t h e

d e t e r m i n a t i o n o f a c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e i n r e s p e c t o f d o c u m e n t s

t l i e s u b j e c t o f a s 2 ( 3 A ) n o t i c e . O n e w o u l d e x p e c t a p r o c e d u r e t o b e a g r e e d

b e t w e e n t h e s o l i c i t o r s f o r t h e i n q u i r y a n d t h o s e f o r t h e p e r s o n s e r v e d w i t h a

n o t i c e . A b s e n t a g r e e m e n t a p r a c t i c c n o t e o r d i r e c t i o n c a n b e i s s u e d . O n e w o u l d

e x p e c t a p r o c e s s t o b e d e t e r m i n e d w h e r e b y t h o s e d o c u m e n t s s a i d t o b e t h e s u b j e c t

o f s u c h a c l a i m w o u l d b e i d e n t i f i e d a n d i s o l a t e d , a n d r e t a i n e d s e p a r a t e l y b y o n e o f

t h e s o l i c i t o r s , i n i t i a l l y p e r h a p s i n a s e a l e d b o x o r e n v e l o p e . T h e a f f i d a v i t i n

s u p p o r t o f t h e c l a i m m a y b e a b l e t o d e s c r i b e s u c h d o c u m e n t s a n d t h e b a s i s o f t h e

c l a i m w i t h s u t r i c i e n t clarit y t o m a k e i n s p e c t i o n o f t h e d o c i u n e n t s unnece.ssarv - t o

r u l e u p o n t h e c l a i m . I n o t h e r i n s t a n c e s , i n s p e c t i o n o f t h e d o c u m e n t s b y t h e

d e c i d i n g t r i b u n a l m a v b e n e c e s s a r y ' , a s c o m m o n l y o c c u r s i n t h e c o u r t s . M a t e r i a l

Owen , Th e Ho n .lastic e The Failure ofHlH Insurance Volume I: A corporate collapse and its lessons Canberr a Publishin g an d Prmtin g Canberr a a t [2.9 ] . " Compar e Re HIH Insurance Limited [2002 ] N S W S C 23 1 a t [ 1 3 ] pe r Barret t J , a judgemen t delivere d afte r th e decisio n o f th e Ful l Cour t o f th e Federa l Cour t i n Daniels whic h wa s reverse d i n th e Hig h Court .

Pag e 2 4

9 8 Report of the Oil-for-Food biqitirif

r e c e i v e d o n s u c h a n a p p l i c a t i o n , a n a l o g o u s i n s o m e r e s p e c t t o a v o i r d i r e

e x a m i n a t i o n , i s d i s r e g a r d e d i n t h e c o n d u c t o f t h e i n i | u i r > \ a s a r e a n y d o c u m e n t s

i n s p e c t e d f o r t h e p u r p o s e o f r u l i n g o n t h e p r i v i l e g e c l a i m . O n l y s u c h d o c u m e n t s i n

r e s p e c t o f w h i c h t h e c l a i m i s r e j e c t e d a n d w h i c h a r e t h u s f o n n a l l y p r o d u c e d t o t h e

i n q u i r y m a y b e h a d r e g a r d t o .

6 2 . T l i e r e a r e t h u s n o p r o c e d u r a l b a r r i e r s t o a R o y a l C o m m i s s i o n d e t e r m i n i n g a c l a i m

f o r l e g a l p r o f e s s i o n a l p r i v i l e g e , w h e n i t i s c l a i m e d i n r e s p o n s e t o a n o t i c e i s s u e d

u n d e r s 2(?,A).

.AWB : Contrai- j Submission s

6.3 . R e l i a n c e w a s p l a c e d b y . A W B u p o n t h e d e c i s i o n o f t h e H i g l i C o u r t i n Baker v

Campbell It c o n t e n d e d t h a t t h e e f f e c t o f t h a t d e c i s i o n w a s t h a t d o c u m e n t s

c l a i m e d t o b e l e g a l l y p r o f e s s i o n a l l y p r i v i l e g e d w e r e e x c l u d e d f r o m a n y

c o m p u l s o r y n o t i c e f o r p r o d u c t i o n b e c a u s e t h e r e w a s n o p o w e r t o i s s u e a n o t i c e t o

r e q u i r e p r o d u c t i o n o f d o c u m e n t s s u b j e c t t o a c l a i m f o r l e g a l p r o f e s s i o n a l

p r i v i l e g e . I n m y v i e w Baker v Campbell d i d n o t s o d e c i d e .

6 4 . Baker v Campbell w a s a d e c i s i o n c o n c e r n i n g I h e p r o p e r c o n s t n i c t i o n o f s 1 0

Crimes Acl ¡914. A m a g i s t r a t e i s s u e d a s e a r c h w a n a n l t o t h e d e f e n d a n t , a f e d e r a l

p o l i c e olTicer . T l i e w a r r a n t a u t h o r i s e d t h e s e i z u r e o f d o c u m e n t s o n t h e p r e m i s e s

o f s o l i c i t o r s f o r t h e p l a i n t i f f . T h e d e f e n d a n t , a c t i n g p u r s u a n t t o t h e s e a r c h w a r r a n t ,

a t t e m p t e d t o s e i z e t h e d o c u m e n t s h e l d b y t h e s o l i c i t o r s . T h e p l a i n t i l T s u e d t h e

d e f e n d a n t i n t h e H i g h C o u r t t o r e s t r a i n h i m f r o m s e i z i n g t h e d o c u m e n t s p u r s u a n t

t o t h e s e a r c h w a r r a n t . W i l s o n J s l a t e d a c a s e p u r s u a n t l o s 1 8 at' Judiciary /let

¡903. l l i e q u e s t i o n s o r e f e r r e d t o t h e F u l l C o u r t o f t h e H i g h C o u r t w a s :

I n th e even t tha t lega l profes.siona l privileg e attache s to , an d i s maintained , i n respec t ot " th e document s hel d b y th e firm , ca n thos e document s b e properl y mad e a subjec t o f a searc h warran t issue d unde r s 1 0 o f th e Cnmes Act^'

6 5 , T l i e p l a i n t i f f c o n t e n d e d t h a t t h e d o c u m e n t s h e l d b y t h e f i m i w e r e t h e s u b j e c t o f

l e g a l p r o f e s s i o n a l p r i v i l e g e . T h e d e f e n d a n t p o l i c e o f f i c e r c o n t e n d e d t h a t l e g a l

p r o f e s s i o n a l p r i v i l e g e d i d n o t a t t a c h t o t h e d o c u m e n t s b e c a u s e o f t h e p u r p o s e s f o r

" ( 1 9 8 3 ) 15 3 CL R 52 , ^^ Baker V Campbell (1983 ) 15 3 CL R 5 2 a t 54 .

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Report of the Oil-for- Foot i Inquiry 99

w h i c h t h e p l a i n t i t l c o n s u l t e d t h e f i n n . a n d f u r t h e r c o t U e n d e d t h a t e v e n i f i t d i d . t h e

d o c u m e n t s inigli t l a w f u l l y b e s e i z e d u n d e r t h e s e a r c h w a r r a n t . ' ^ D a w s o n . T s a i d :

I t I S unnecessan, ' t o decid e betwee n th e riva l contention s a s t o th e existenc e o f th e pnvileg e becaus e th e questio n whic h i s aske d o f th e Cour t i s wheùier , i n th e even t tha t lega l professiona l privileg e attache s t o an d i s maintaine d i n respec t o f th e document s hel d b y th e firm , the y ca n properl y b e mad e subjec t o f a searc h warran t issue d unde r s K l o f th e Crimes Aa. Fo r th e purpose s o f th e question , privileg e i s assumed, "

6 6 . N o q u e s t i o n o f h o w t h e i s s u e o f p r i v i l e g e vva. s t o b e r e s o l v e d a r o s e .

6 7 . T l i e C o u r t h e l d , i n t h e w o r d s o f D e a n e .1 :

Ther e is . howe^er , n o warran t fo r restrictin g th e broa d statement s o f th e principl e o f th e confidentialit y o f lega l professiona l communication s l o th e particula r privileg e agaias t beii w compelle d t o giv e evidenc e o r produc e document s injudicia l (o r quas i judicial ) proceedmg s

6 8 . A c c o r d i n g l y , s i n c e t h e Crimes Act 1914 d i d n o t e v i n c e a n i n t e n t i o n t o o u s t t h e

p n v i l e g e . t h e p r i v i l e g e a p p l i e d t o d o c u m e n t s w i t h i n t h e s c o p e o f a s e a r c h w a n a n t

u n d e r s 10 .

6 9 . .A s D e a n e J c o n t i n u e d :

I t I S a settle d rul e o f constructio n tha t genera l provision s o f a statut e shoul d onl y b e rea d a s abrogatin g commo n la w principle s o r right s t o th e exten t mad e necessar y b y e.'ipres s word s o r necessar y intendment . A s ha. s bee n seen , th e underlyin g prmcipl e tha t a perso n shoul d b e entitle d t o preserv e th e confidentialit y o f relevan t communication s betwee n himsel f an d hi s attorne y i s regarde d a s o f suc h importanc e b y th e commo n la w tha t th e court s themselve s d o no t requir e disclosur e o f th e conten t o f suc h communication s eve n i f i t appear s tha t suc h drsclosur e woul d b e conduciv e t o justic e i n a particula r cas e an d eve n i f th e proceeding s b e betwee n partie s neithe r o f who m i s entitle d t o clai m th e protectio n o f th e privileg e a s regard s th e relevan t document s o r information . Bot h logi c an d authorit y suppor t th e presen t da y acceptanc e o f th e preservatio n o f tha t confidentialit y a s a fundamenta l an d genera l principl e o f th e commo n law . I t i s l o b e presume d tha t i f th e Parliamen t intende d t o authoris e th e impairmen t o r destructio n o f tha t confidentialit y b y administrativ e actio n i t woul d fram e th e relevan t statutor y mandat e m e.xpres s an d unambiguou s term s "

70 . H a v i n g se t o u t t h e t e n n s o f s 10 . D e a n e . 1 s a i d :

A s ca n b e seen , s 1 0 contam s n o expres s referenc e t o communication s betwee n a perso n an d hi s lega l advisers . I t neithe r expressl y include s the m in , no r expressl y exclude s ihe m from , th e thing s t o whic h i t refers . Ther e i s nothin g i n eithe r s 1 0 o r i n an y othe r provisio n o f th e Ac t whic h indicate s eithe r tha t th e Parliamen t directe d it s attentio n t o th e particula r matte r o f modifyin g o r destroyin g th e confidentialit y o f relevan t communication s betwee n a perso n an d hi s lega l adviser s o r tha t ther e e.xiste d a legislativ e intentio n t o modif y th e commo n la w principl e tha t th e confidentialit y o f suc h communication s shoul d b e preserved . I n accordanc e wit h th e ordinar y prmciple s o f construction , th e sectio n shoul d b e construe d a s no t includmg , i n th e thing s whic h i t authorise s t o b e inspecte d o r seized , document s whos e confidentialit y woul d b e protecte d i n th e court s o f th e lan d b y th e doctrin e o f lega l professiona l privilege . Tha t constructio n o f s 1 0 i s als o supporte d b y th e consideratio n tha t i t i s scarcel y likel y tha t Parliamen t woul d hav e intende d t o authoris e a n administrativ e seizur e o f document s o n th e groun d tha t the y woul d affor d "evidenc e a s t o th e commission " o f a n offenc e eithe r i n

^^ Baker V Campbell i\9%y) 153 CLR.52a t 1 2 0 - 1 2 1 pe r Dawso n J , Baker V Campbell i]9S3] 1 5 3 C L R 5 2 a t 12 1 pe r Dawson. ! ® Baker v Campbell (1983 ) 15 3 CL R 5 2 a t 11 5 pe r Dean e J . Bakerv Campbell (mS) 1 5 3 C L R 5 2 a t 11 6 - 11 7 pe r Dean e T

Pag e 2 6

10 0 Report of the Oil-for-Food Inqtiir} /

circumstances where legal professional privilege would he applicable to prevent the documents being received in evidence on a prosecution for that offence or in circumstances where the administrative seizure of the documents would destroy that privilege on the hearing of such a prosecution. The consequence of that construction of the section is that the scarch warrant in the present case should be read as not referring to documents to which legal professional privilege attaches.Æ^

71. .\s the question referred to the Full Court assumed that legal professional privilege

attached to the documents, as Dawson .1 made clear, the Court answered the

question asked, by excluding documents assumed to be the subject of legal

professional privilege, from the documents pcnnitted to be seized tmder the

warrant, Hiat Howed from a construction o fs 10.

72. Baker i' Campbell stands for the proposition that where a search warrant issued

under s 10 Crimes Act 1914. as it then stood, and where documents otherwise

falling within a warrant had attached to them legal professional priv ilege, the

warrant should be read dovMi to exchide such documents from being within its

terms.

73. Iliis led to a difficttlty referred to by Bremian .1, His Honour, in the minority

along with ¸ i b bs CJ and Mason J. said:

If the privileges which affect the obligation lo testify or lo produce documents in judicial proceedings are lo be engrafted upon or lo modify powers conferred on investigative agencies, some procedure for determining the validity of a claim of pnvilege has to be devised. The European Court of Justice prescribed such a procedure in .4.M. & S. Europe Limited v Commission of the European Communities, u˙lismg for the purpose of the Commission's power lo impose t'lnes. But it is quite beyond the power of an Australian court to prescribe such procedures. If the power of search and seizure conferred by a s lOfb) warrant does not e.xtend to privileged documents, there is no judicial procedure prescribed to resolve contested claims. Declaratory relief or prosecution seem to be the only avenues of judicial resolulion

The Court's primary function in the present ca.se is not lo mould a common law rule of evidence, but to construe a statute which confers investigative power."

74. As is apparent from the passages quoted, once il was recognised that legal

professional privilege was a fundamental riglit. one had first to constnie the statute

under which a power was exercised, which resulted in the claim being raised, to

detennine whether that statute abrogated in suiTicientK clear tenns that

fundamental privilege. If il did not, the power conferred by the statute had to be

read down to accommodate the fundamental riglit to legal professional privilege.

ITte matter thus became one of statutorv construction.

Baker v CampA^// (19S.Õ) I .s.1 CLR 5 2 at 117 118 per Deane J, Æ Baker V Campbell (19?.^) 153 CLK 52 at 105 per Brennan J,

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Report of the Oil-for-Food Inquirif 101

7 5 . B y I h e t i m e t h e H i g l i C o u r t c a m e t o c o n s i d e r Commissioner of Australian Federal

Police V ¡'ropend Finance Pty Limited!'^ a p r o c e d u r e t o e n a b l e t h e d e t e n n i n a t i o n

o f c l a u n s f o r l e g a l p r o l e s s i o n a l p r i v i l e g e i n r e s p e c t o f d o c u m e n t s o t h e r w i s e f a l l i n g

w i t h i n a s e a r c h w a i r a n t h a d b e e n a g r e e d b e t w e e n t h e C o m m i s s i o n e r o f t h e

A u s t r a l i a n F e d e r a l P o l i c e a n d t h e L a w C o u n c i l o f A u s t r a l i a . B r e t n i a n C J s a i d :

.A s 1 pointe d ou t i n Baker v Campbell, th e vie w tha t lega l professiona l privileg e qualifie d th e powe r o f searc h an d seizur e conferre d b y a warran t issue d pursuan t t o s 10(1 ) o f th e Crimes Act 1914 (Cth ) a s I t stoo d a l th e tim e an d a s i t stoo d wit h som e immateria l variation s whe n th e warrant s m lli e piescn t cas e wer e Ksuc d - necessitate d th e devism g o f som e procedur e fo r

determmin g a clai m o f privileg e i f i l shoul d b e raise d durin g th e executio n o f a warrant . Suc h a procedur e wa s no t devise d b y th e Courts , bu t th e La w ("ounci l o f .Vustrali a an d th e .Australia n Federa l Polic e agree d upo n "Genera l Guidelines "

76 . I ' n d e r t h o s e g t i i d e l i n e s . w a r n u i t s i s s u e d f o r s e r v i c e u p o n s o l i c i t o r s ' o f f i c e s w e r e

e n d o r s e d " i n a c c o r d a n c e w i t h t h e p r o c e d u r e se t o u f i n t h e G e n e r a l G u i d e l i n e s .

T l i a t p r o v i d e d f o r l e g a l p r o f e s s i o n a l p r i v i l e g e t o b e p r e s e r v e d b y d o c u m e n t s

s e i z e d f r o m t h e s o l i c i t o r s " o f l l c e b e i n g p l a c e d i n a s e a l e d e n v e l o p e , h e l d b y t h e

p o l i c e u n d e r t h e w a r r m i t . w i t h t h e d o c u m e n t s b e i n g r e t u r n e d i f a n d w h e n l e g a l

p r o f e s s i o n a l p r i v i l e g e w a s e s t a b l i s h e d . Tli e a g r e e d p r o c e s s f o r e s t a b l i s h i n g l e g a l

p r o f e s s i o n a l p r i v i l e g e w a s f o r t h e p a r t y c l a i m i n g i t t o c o m m e n c e p r o c e e d i n g s i n

t h e F e d e r a l C o u r t s e e k i n g a n o r d e r f o r r e v i e w t i n d e r t h e Administrative Decisions

(Judicial Review) Act J 977, a n d a l s o u n d e r s 3 9 B o f t h e Jndiciaty Act 1903.

7 7 . T l i e p r o v i s i o n s o f t h e .Ac t c o n f e n i n g a p o w e r t o i s s u e a s u m m o n s f o r t h e

p r o d u c t i o n o f d o c u m e n t s , a n d p r e s c r i b i n g t h e o b l i g a t i o n s u p o n t h o s e ser v e d w i t h

s u c h a s u m m o n s , a r e q u i t e d i f f e r e n t t o t h o s e i n s 1 0 o f t h e Crimes Act 1914.

P l a i n l y e n o u g h t h e r e i s n o s p e c i f i c o r s u t f i c i e n t i n d i c a t i o n n e g a t i n g t h e rigii t o f

l e g a l p r o f e s s i o n a l pri v i l e g e . H o w e v e r , t h e s t a t u t o r y p r o v i s i o n s f o u n d i n s .3(4 ) a n d

( 5 ) i n d i c a t e t h e c i r c u m s t a n c e s i n w h i c h a n d t h e t i m e a t w h i c h , a n e s t a b l i s h e d

c l a i m o f l e g a l p r o f e s s i o n a l p r i v i l e g e n e g a t e s t h e o b l i g a t i o n o f p r o d u c t i o n . S e c t i o n

3 ( 4 ) i s i n m a n d a t o r y t e r m s . D o c u m e n t s , t h e s u b j e c t o f a c l a i m f o r l e g a l

p r o f e s s i o n a l p r i v i l e g e , m u s t b e p r o d u c e d . H o w e v e r , i f t h a t c l a i m i s e s t a b l i s h e d , s

3 ( 4 ) c e a s e s t o a p p l y s u c h t h a t t h e d o c u m e n t s p r o d u c e d a n d s u b j e c t l o t h e

e s t a b l i s h e d c l a i m m u s t b e h e l d t o h a v e b e e n e . x c l u d e d f r o m t h o s e r e q u i r e d t o b e

p r o d u c e d t i n d e r t h e s u m m o n s . S u b s e c t i o n ( 5 ) i m p o s e s o n t h e p a i l y m a k i n g t h e

" ( 1 9 9 6 ) 1 8 8 CL R 50 1 " .iiisiralian Federal Police v Propend linance Pty Limited ( 1996) 18 8 CL R 50 1 a t 50 5 5U 6 pe r Brenna n C J

Pag e 2 8

10 2 Report of the Oil-for-Food Inqtiir} /

claim to establish it It is not necessary to read down the power contained in s

3(4). as was done in the case o fs 10 Cnmes Act. to accommodate an established

clami for legal professional privilege. That is because the statute contemplates a

process whereb\ that claim can be established and nilcd upon, such that the

plenary power contained in s .3(4) is maintained but ceases to apply to particular

documents if there be a reasonable e.xcuse. including the excuse that the

documents are properly subject to legal professional privilege, from production.

Tliere was no such contemplation in s 10.

Conclusion

78. It follows, in my view, that :

a. ITie .Act does not abrogate an entitlement to claim legal professional

privilege when documents are required to be produced pursuatit to a

notice issued under s 2(3A);

b. Tlie tiiaking of a "claim" for legal professional privilege does not

negate the obligation itnposed by s 3(4) to produce such documetits in

answer to the notice:

c. Hie obligation of production is negated only if "reasonable excuse" is

shown within the meiuiing of s 3(5). w hich then reduces the obligation

of production imposed by s 3(4) to exclude documents the subject of

an established claim for legal professional privilege;

d. "Reasonable excuse" within s 3(5), includes an established claim for

legal professional privilege;

e. Tlte Act confers an ancillary or incidental power upon a Royal

Coiimiissioner to detennine whether the claim of legal professional

privilege is established;

f. The onus of establishing the claim for legal professional privilege lies

on the party claiming it. The claim mu.st be supported by evidence

stilTicient to justify the making of an order upholding the claim; and

Page 29

Report of the Oil-for-Food Inquirif 103

g . A d e c i s i o n b y a R o y a l C o m m i s s i o n e r r e j e c t i n g a c l a i m f o r l e g a l

p r o f e s s i o n a l p r i v i l e g e , a n d t b u s r e q u i r i n g p r o d u c t i o n o f t h e d o c u m e n t s

t o t h e C o m m i s s i o n b e c a u s e o f t h e o p e r a t i o n o f s 3 ( 4 ) . i s s u b j e c t t o

r e v i e w b\ - tli e F e d e r a l C o u r t p u r s t t a n t t o t h e Administrative Decisions

(Judicial Revtew) Act 19'"^ an d s Judiciary Act ¡903.

79 . n s c r e r e m a i n s t h e q u e s t i o n w h e t h e r t h e c l a i m o f l e g a l p r o f e s s i o n a l p r i v i l e g e i s

e s t a b l i s h e d o n t h e e v i d e n c e p l a c e d b e f o r e m e i n r e l a t i o n t o e x h i b i t 6 6 5 .

8 0 I n m y v i e w , i t i s n o t . Tli e e v i d e n c e o f D r F u l l e r m a k e s p l a i n t h a t t h e d o c u m e n t

w a s p r e p a r e d f o r t h e d o m i n a n t p u r p o s e o f c o n s i d e r i n g w h e t h e r a s t r a t e g y o f

a p o l o g y w o u l d b e a d o p t e d b y A W B . I t w a s n o t p r e p a r e d f o r t h e d o m i n a n t p u r p o s e

o f o b t a i n i n g l e g a l tidvice .

8 1 . f i l e a f f i d a v i t o f M s R o s e m a r y P e a v e y dt:ie s nii t c o n t r a d i c t t h a t e v i d e n c e , n o r d o e s

i t e s t a b l i s h a n y b a s i s f o r t h e c l a i m . . \ t it s h i g h e s t , i t c o n t a i n s h e r u n s u p p o r t e d

c o n c l u s i o n . Tlia t i s n o t s u f f i c i e n t t o e s t a b l i s h a c o n t e s t e d c l a i m f o r l e g a l

p r o f e s s i o n a l p r i v i l e g e .

8 2 . . A c c o r d i n g l y . I r e j e c t t h e c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e i n r e s p e c t o f e.xhibi t

6 6 5 . .A s a n o n - p u b l i c a t i o n o r d e r p u r s u a t i l t o s 6 D o f t h e A c t w a s m a d e p e n d i n g a

d e t e n n i n a t i o n o f t h e p r i v i l e g e , i t i s a p p r o p r i a t e t h a t s u c h o r d e r b e r e v o k e d .

8 3 . I n a c c o r d a n c e w i t h c o n v e n t i o n , . A W B s h o u l d b e g i v e n t h e o p p o r t u n i t y t o c o n s i d e r

t h e s e r e a s o n s a n d . s h o u l d i t w i s h t o d o s o , s e e k r e v i e w o f t h e o r d e r s p r o p o s e d i n

t h e F e d e r a l C o u r t .

8 4 . T l i e f o n n a l o r d e r s I p r o p o s e l o m a k e a r e :

a . H i e c l a i m f o r l e g a l p r o f e s s i o n a l p r i v i l e g e i n r e s p e c t o f e x h i b i t 6 6 5 i s

r e j e c t e d : a n d

b . l l i e n o n - p u b l i c a t i o n o r d e r m a d e p u r s u a t i t t o s 6 D i n r e s p c c t o f e x h i b i t

6 6 5 i s r e v o k e d .

Pag e -11 1

10 4 Report of the Oil-for-Food biqitiri f

85. I will del'er making these orders until lOani on Thursday 6 April 2006. In the

event of .AWB wishing to challenge the first order in the federal Court. I will

continue the second order pending the determination of the Federal Court.

5 .April 2006

Page 31

Report of the Oil-for-Food Inquirif 105

Figur e 9. 3 Reasons , 1 4 Marc h 200 6

Reason s

1 . A p p l i c a l i o i i ha s b e e n m a d e b y t h e C o m m o n w e a h h o n b e h a l f o f a n u m b e r o f

C o m m o n w e a l t h a g e n c i e s withi n t h e A u s t r a h a n h i t e i h g e n c e C o m m u n i t y ( A I C )

tha t t h e r e no t b e p u b l i s h e d .

a . certai n d o c u m e n t s p r o d u c e d t o thi s I n q u i i y b y th e A I C ; an d

b . a f f i d a v i t s i n suppor t o f th e a p p l i c a t i o n .

2 . I n s u p p o r t o f th e a p p l i c a t i o n I h a v e r e c e i v e d thre e statutor y d e c l a r a t i o n s , w h i c h I

h a v e b e e n a s k e d t o k e e p secret . T h e y ar e m a r k e d Secre t 1 , 2 a n d 3 r e s p e c t i v e l y

a n d h a v e bee n initialle d b y m e .

3 . T h e d o c u m e n t s p r o d u c e d b y th e A I C ar e c o n t a i n e d i n a f o l d e r , w h i c h 1 h a v e

m a r k e d S e c r e t 4 .

4 . T h e g r o u n d s u p o n w h i c h th e a p p l i c a t i o n i s b r o u g h t a r e tha t th e p u b l i c interes t

r e q u i r e s tha t th e d o c u m e n t s an d th e a f f i d a v i t s r e m a i n secre t b e c a u s e :

a . th e d o c u m e n t s ar e h i g h l y c l a s s i f i e d f o r nationa l securit y r e a s o n s ; a n d

b . th e statutor y d e c l a r a t i o n s , i f d i s c l o s e d , migh t revea l i n f o n n a t i o n w h i c h

m i g h t d e f e a t th e protectio n f o r th e d o c u m e n t s , w h i c h t h e

C o m m o n w e a l t h seek s l o i n v o k e .

5 . T h e s u b m i s s i o n s i n suppor t o f t h e a p p l i c a t i o n c o n t e n d tha t publi c d i s c l o s u r e o f t h e

d o c u m e n t s w o u l d ;

a . r e d u c e A u s t r a l i a ' s intelligenc e p a r t n e r s ' w i l l i n g n e s s t o p r o v i d e f u r t h e r

i n f o n n a t i o n l o A u s t r a l i a ' s i n t e l l i g e n c e an d la w e n f o r c e m e n t a g e n c i e s ;

a n d

b . c o m p r o m i s e s o u r c e s an d m e t h o d s o f intelligenc e collectio n a n d

t h e r e b y s e r i o u s l y p r e j u d i c e A u s t r a l i a ' s nationa l security , d e f e n c e , la w

e n f o r c e m e n t a n d f o r e i g n liaiso n interests .

6 . T h e secre t statutor y d e c l a r a t i o n s establis h t h o s e g r o u n d s fo r th e o r d e r s s o u g h t , '

7 . T h e p o w e r o f thi s Inquir y t o m a k e a p p r o p r i a t e o r d e r s f o r n o n - d i s c l o s u r e o f b o t h

I h e d o c u m e n t s an d th e secre t statutor y d e c l a r a t i o n s i s u n d o u b t e d (se e s 6 D ( 3 ) ( b )

o f th e Royal CommixsUms Act ¡902 (Cth)) .

8 . T h e r e i s p r e c e d e n t f o r c o m m i s s i o n s o f inquir y m a k i n g suc h orders. "

StsSankeyv Whiihm (1<)7S ) 14 2 CL R 1 a l 4 3 - 4 4 pe r Gibb s .^iCJ;/i/iiff)-am/O ™ i'/?(1984 ) 15 4 CL R 40 4 a i 43 5 pe r Wilso n an d Dean e J J ; an d Church of Scientology v Woudiivm i (1980 ) 4 3 AL R 58 7 a t ft02 pe r Vlaso n J .

Page l

10 6 Report of the Oil-for-Food Inq t i i r } /

9. I have considered wiiether it is appropriate to restrict availability of the documents

and secret statutory declarations to two counsel and two solicitors assisting the

Inquiry and to myself, to the exclusion of both other lawyers assisting the Inquiry,

and more importantly, counsel and solicitors representing A WB Limited and

individual witnesses called at the Inquiry. I have formed the view that access

should be so restricted. This means that counsel appearing for Limited and

witnesses are unable adequately to address argument to nie as to why such orders

should not be made. This position has been recognised by the courts, wliich have

held that, in an appropriate case, and in particular where issues of national security

are involved, that undesirable consequence must nonetheless give way to the

tiational interest,^

10.1 have considered the secret documents. It will be necessary for a distillation of

the material to be made, which does not disclose the source of the infonnation, nor

pennit persons who may have access to the distillation to detennine Froin whence

it came or how it was collected or received.

11. The appropriate course is for the Commonwealth on behalf of the AIC to provide

to me a draft document whicli, in the view of the AIC, does not disclose material

which ought not. in the public interest, be disclosed, and which satisfies the

Commonwealth that the summation does not infringe Australia's national security

interest. I will then consider that summation, and if satisfied that it is a sufficient

and adequate summation of the material in the secret documents, will then publish

it,

12. Four copies of the secret documents have been provided to the Inquiry. One is for

my use, two are for the use of nominated counsel and solicitors assisting the

Inquiry, and the fourth is available to be shown to witnesses who are understood

to have the appropriate security clearance entitling them to see the documents. If a

" See Inquiry into the Centenary House Lease, Commissioner Hjnt, first decision on public interest immunity, 20 September 2004; see references to rnaterial not being disclosed in the Report on tlie .Australian Security Intelligence Organisation by the Royal Commission on Australia's Securiiy and Intelligence Agencies, December i9S4, Australian Govermnent Publishing Service, Canberra 19X5. p 2; Repon on tlie Australian Secret Intelligence Service (Public Edition) by the Commission of Inquiry into the Australian Sccrct Intelligence Servicc March 1995, Australian Government Publishing Service, Canberra 1995, page xxi paragraph 9.

" SscAlisrerandOrs i- fi (!<)84) 154 CLR 404 31469 perGibbs CJ, Wilson. Brennan and Dawsor JJ; Amer v The Minister for Immigration. Local Government aiul Ethnic Affairs (Nos I and 2J at 2 - 3 per Lockhail J (unreported, I.ockhart J. IS and 19 December 1989); Nicopouhs v Commissioner for

Corrective Semccs [2004) NSWSC 562 per Smart AJ at [83] and [99]; and Tratjesic v Atlorncy-General of Ihe Commonweahh of Australia (2006) FCA 125 (9 Februarv 2006) at [23] - [24] per Rares J.

Page 2

Report of the Oil-for-Food Inquirif 107

distillatio n o f thos e document s i s published , o n c e th e evidenc e o f witnesse s w h o

m i g h t b e show n th e secre t document s i s complete , I direc t tha t th e fou r copie s o f

t h o s e d o c u m e n t s an d th e secre t statutot- y declaration s b e returne d t o th e solicito r

f o r th e C o m m o n w e a l t h s o tha t the y m a y b e returne d t o th e relevan t agencie s

withi n th e AIC , upo n thos e agencie s undertakin g t o th e solicito r fo r th e Inquir y t o

p r o d u c e suc h secre t document s an d secre t affidavit s upo n 2 4 hour s notic e fro m

thi s inquiry .

13 . Pursuan t t o s 6 D o f th e Royal Commissions Act 1902, 1 orde r that :

{1 ) th e secre t statutor y declarations , an d secre t documents , marke d Secre t 1 , 2 , 3

a n d 4 respectively , no t b e publishe d sav e that :

a . the y m a y b e viewe d b y th e C o m m i s s i o n e r an d nominate d counse l an d

solicitor s assistin g th e Inquir y bein g Messr s Agiu s S C , W i g n e y .

O w b r i d g e an d K a m e n c a k ;

b . witnesse s wh o migh t b e expecte d t o hav e see n th e secre t d o c u m e n t s a t

th e tim e the y wer e o f f i c a s o f th e Departmen t o f Foreig n Affair s an d

Trad e m a y b e s h o w n a cop y o f th e secre t document s an d aske d

question s abou t the m I n a m a n n e r tha t doe s no t disclose , i n an y way :

I . th e content s o f th e documents ;

II . th e source s o f th e content s o f th e documents ; o r

iii . th e originatin g agenc y o f th e content s o f th e document s

unles s an y particula r disclosur e i s specificall y authorise d b y me .

1 4 . 1 indicat e tha t I wil l no t authoris e a n y suc h particula r disclosur e unti l th e

C o m m o n w e a l t h ha s bee n give n th e opportunit y t o b e hear d regardin g an y suc h

c o n t e m p l a t e d disclosure .

1 4 M a r c h 200 6

Pag e 3

10 8 Report of the Oil-for-Food Inqtiir} /

Figur e 9. 4 Reasons , 3 0 Marc h 200 6

Reason s

1 . O n H M a r c h 2 0 0 6 I uphel d a clai m m a d e fo r publi c interes t i m m u n i t y b y th e

C o m i n o n w e a l t h o n b e h a l f o f a n u m b e r o f agencie s w i t h i n th e A u s t r a l i a n

i n t e l l i g e n c e C o m m u n i t y . H a v i n g u p h e l d th e clai m I m a d e a n order , p u r s u a n t t o s

6 D of Ihe Royal Commissions Acl 1902 (Cth) , that :

"(1 ) th e secre t statutor y declarations , a n d secre t d o c u m e n t s , m a r k e d Secre t

1 , 2 , 3 a n d 4 respectivel y no t b e publishe d sav e that :

a . t h e y m a y b e v i e w e d b y th e C o m m i s s i o n e r an d n o m i n a t e d c o u n s e l

an d solicitor s assistin g th e Inquir y bein g M e s s r s A g i u s S C ,

W i g n e y , O w b r i d g e an d K a m e n c a k ;

b . w i t n e s s e s w h o migh t b e expecte d t o h a v e see n t h e secre t

d o c u m e n t s a t th e tim e the y w e r e o f f i c e r s o f th e D e p a r t m e n t o f

F o r e i g n A f f a i r s a n d T r a d e m a y b e s h o w n a c o p y o f th e secre t

d o c u m e n t s an d aske d question s abou t t h e m i n a m a n n e r tha t d o e s

no t disclose , i n a n y way :

i . t h e content s o f th e d o c u m e n t s ;

ii . th e source s o f th e content s o f th e d o c u m e n t s ; o r

iii . th e originatin g a g e n c y o f th e content s o f th e d o c u m e n t s

u n l e s s an y particula r disclosur e i s specificall y authorise d b y m e . " '

2 . I i n d i c a t e d tha t I w o u l d no t authoris e a n y suc h particula r d i s c l o s u r e unti l th e

C o m m o n w e a l t h h a d b e e n give n th e opportunit y t o b e hear d r e g a r d i n g a n y s u c h

c o n t e m p l a t e d disclosure .

3 . A s th e r e a s o n s m a d e clear , th e applicatio n w a s b a s e d u p o n thre e statutor y

d e c l a r a t i o n s m a r k e d Secre t 1 , 2 an d 3 . I w a s satisfie d tha t thos e secre t statutoi- y

d e c l a r a t i o n s establishe d th e matter s sai d t o groun d tha t application , n a m e l y tha t

" t h e d o c u m e n t s ar e highl y classifie d fo r nationa l securit y r e a s o n s , " ' an d tha t th e

p u b l i c d i s c l o s u r e o f th e d o c u m e n t s w o u l d :

"a . r e d u c e A u s t r a l i a ' s intelligenc e p a r t n e r s ' willingnes s t o p r o v i d e f u r t h e r

i n f o r m a t i o n t o A u s t r a l i a ' s intelligenc e an d l a w e n f o r c e m e n t a g e n c i e s ; a n d

' Reasons , ! 4 Marc h 200 6 a t [13] . ' Reasons , 1 4 Marc h 200 6 a t [4(a)] .

Pag e 1

Report of the Oil-for-Food Inquin/ 10 9

b . c o m p r o m i s e s o u r c e s a n d m e t h o d s o f i n t e l h g e n c e c o l l e c t i o n a n d

t h e r e b y s e r i o u s l y p r e j u d i c e A u s t r a l i a ' s nationa l security , d e f e n c e , l a w

e n f o r c e m e n t an d f o r e i g n liaiso n i n t e r e s t s . " '

4 . H a v i n g s a t i s f i e d t n y s e l f tha t ther e w a s materia l w h i c h w o u l d suppor t th e m a k i n g

o f a p p r o p r i a t e orders , I the n c o n s i d e r e d w h e t h e r 1 h a d p o w e r t o m a k e a p p r o p r i a t e

o r d e r s . I w a s satisfie d tha t 1 did , a n d a d d r e s s e d tha t m a t t e r i n p a r a g r a p h s 7 a n d 8

o f n i y r e a s o n s .

5 . B e i n g s a t i s f i e d tha t t h e r e w a s m a t e r i a l s u f f i c i e n t t o s u p p o r t th e m a k i n g o f

a p p r o p r i a t e orders , a n d o f p o w e r l o d o so , i n p a r a g r a p h 9 o f th e r e a s o n s 1

a d d r e s s e d t h e " b a l a n c i n g p r o c e s s " r e q u i r e d t o d e t e n n i n e w h e t h e r th e c l a i m f o r

p u b l i c interes t i m m u n i t y , an d th e c o n s e q u e n t i a l n o n - d i s c l o s u r e order , s h o u l d b e

u p h e l d . I cite d th e p a g e i n th e j u d g e m e n t o f G i b b s CJ , W i l s o n , B r e n n a n a n d

D a w s o n J J i n Alister v JVi e Queen'* w h e r e tha i " b a l a n c i n g p r o c e s s " i s r e f e r r e d lo . I

e x p r e s s e d tn y v i e w tha t t h e r e s h o u l d b e a restrictio n o n p u b l i c a t i o n , r e c o g n i s i n g

tha t t h e e x c l u s i o n o f c o u n s e l an d solicitor s r e p r e s e n t i n g A W B L i m i t e d a n d

i n d i v i d u a l w i t n e s s e s b e f o r e thi s I n q u i r y f r o m v i e w i n g t h e d o c u m e n t s w a s a f a c t o r

t o b e c o n s i d e r e d . I r e f e r r e d l o th e fac t tha t n o t w i t h s t a n d i n g a recognitio n o f t h i s

" u n d e s i r a b l e c o n s e q u e n c e " , i n a n a p p r o p r i a t e c a s e , a n d m particula r w h e r e i s s u e s

o f n a t i o n a l s e c u r i t y w e r e i n v o l v e d , th e u n d e s i r a b l e c o n s e q u e n c e a f f e c t i n g t h e

r i g h t s o f A W B L i m i t e d a n d individua l w i t n e s s e s " m u s t n o n e t h e l e s s g i v e w a y t o

t h e nationa l i n t e r e s t . " ' T h a t w a s a c l e a r b a l a n c i n g o f th e c o m p e t i n g interests ,

6 . H a v i n g e n g a g e d i n th e " b a l a n c i n g p r o c e s s " an d h a v i n g e x p r e s s e d m y v i e w tha t t h e

o u t c o m e m u s t b e a restrictio n o n p u b l i c a t i o n o f th e d o c u m e n t s , I the n sougli t l o

m i n i m i s e t h e d i s a d v a n t a g e t o w h i c h A W B L i m i t e d an d i n d i v i d u a l w i t n e s s e s

w o u l d b e s u b j e c t e d a s a resul t o f ray decision . 1 indicate d tha t 1 ha d c o n s i d e r e d

t h e secre t d o c u m e n t s a n d tha t i t w o u l d b e n e c e s s a r y f o r th e C o m m o n w e a l t h t o

p r o v i d e t o m e a distillatio n o f th e m a t e r i a l w h i c h d i d no t d i s c l o s e tha t w h i c h o u g h t

no l t o b e d i s c l o s e d i n th e p u b l i c interes t ot i g r o u n d s o f nationa l security.* ' 1

i n d i c a t e d that , i f satisfie d tha t th e s u m m a t i o n w a s " a sufficteti i a n d a d e q u a t e

s u m m a t i o n o f th e materia l i n th e secre t d o c u m e n t s , " I w o u l d publis h it. '

" Reasons , 1 4 Marc h 200 6 a l [5(a)-(b)| . 11984 ) 15 4 CL R 40 4 a t 46 9 pe r Gibb s CJ , Wilson . Brenna n an d Dawso n JJ . ' Reasons , 1 4 Marc h 200 6 a t (9j . ' Reasons , 1 4 Marc h 200 6 a t 110 ] - [11] ,

' Rea.sons , 1 4 Marc h 20n6a t [ I I] ,

Pag e 2

11 0 Report of the Oil-for-Food Inqtiir} /

7 . 1 c o n c l u d e d m y r e a s o n s a t T r a n s c n p t 4 4 5 5 . M r Jud d Q C the n s u b m i t l e d tha t I

s h o u l d no t h a v e a d d r e s s e d th e issu e o f p u b l i c interes t i m m u n i t y . Tha t s h o u l d h a v e

b e e n a d d r e s s e d " i n atiothe r p l a c e i n r e s p o n s e t o a n o t i c e t o producc,"' * H e

c o n t e n d e d tha t tha i w o u l d h a v e p r o d u c e d th e resul t tha t " t h e m a t e r i a l w o u l d n o t b e

a v a i l a b l e t o t h e C o m m i s s i o n f o r il s c o n s i d e r a t i o n an d f o r t h e secre t c o n s i d e r a t i o n

o f w i t n e s s e s . " ' ' H i s s u b m i s s i o n w a s tha t a s I ha d ha d a c c e s s t o t h e secre t m a t e r i a l ,

a n d h e w a s u n a b l e i o h a v e a c c e s s t o it , th e c o n s e q u e n c e w a s tha t " a n y findings

tha t a r e m a d e a d v e r s e t o th e interest s o f A W B i n c o n n e c t i o n wit h t h e stat e o f

k n o w l e d g e o f D F A T wil l i n v o l v e a significan t a n d m a t e r i a l d e n i a l o f natura l

j u s t i c e . " ' " W h y tha t w a s s o w a s no t m a d e clear .

8 . T h e s u b m i s s i o n o f M r J u d d tha t th e Inquir y shoul d n o t h a v e a d d r e s s e d th e

q u e s t i o n o f p u b l i c interes t i m m u n i t y i s b a s e d o n a v i e w tha t i s s u e s o f p r i v i l e g e c a n

b e d e c i d e d o n l y b y a b o d y e x e r c i s i n g a j u d i c i a l p o w e r . ! l i s c o n t e n d e d tha t a b o d y

s u c h a s a R o y a l C o m m i s s i o n e x e r c i s i n g th e e x e c u t i v e p o w e r o f t h e

C o m m o n w e a l t h h a s n o p o w e r t o h e a r o r d e c i d e suc h a matter . S u c h a n issu e m u s t

b e d e c i d e d b y t h e F e d e r a l C o u r t .

9. I l i s u n n e c e s s a r y fo r m e t o e x p r e s s m y vie w o n thi s a p p r o a c h i n t h e s e r e a s o n s

b e c a u s e s 6 D o f t h e Royal Commissions Act 1902 p r o v i d e s a n i n d e p e n d e n t s o u r c e

o f p o w e r fo r Ih c o r d e r m a d e .

10 . M r L a c a v a S C , a p p e a r i n g f o r M r Stott , a c k n o w l e d g e d tha t i t w a s no t i n f r e q u e n t

that , i n a p u b l i c interes t i m m u n i t y claim , a j u d g e migh t h o l d tha t d o c u m e n t s m i g h t

n o t b e a v a i l a b l e t o th e p a r t i e s b e c a u s e o f t h e nationa l i n t e r e s t . " M r L a c a v a

a c c e p t e d tha t h e ha d n o t d i g e s t e d th e r e a s o n s I ha d g i v e n . ' " T h e r e the n o c c u r r c d

a n e x c h a n g e b e t w e e n M r L a c a v a an d m y s e l f w h i c h he , a n d o t h e r c o u n s e l , h a v e

m i s i n t e r p r e t e d a s b e i n g a s t a t e m e n t b y m e tha t I h a d no t e n g a g e d i n t h e n e c e s s a r y

" b a l a n c i n g p r o c e s s " w h i c h t h e a u i h o n t i e s require . I se t o u t t h e t r a n s c r i p t

v e r b a t i m :

" M r L a c a v a : ,, . t h e s u m m a r y , o f c o u r s e , isn' t t h e actua l d o c u m e n t s - a m I

c o r r e c t i n u n d e r s t a n d i n g w h a t y o u ' v e sai d thi s m o r n i n g i s i n d e e d this , tha t

y o u w o u l d e x a m i n e th e s u m m a r y , no t th e d o c u m e n t s t h e m s e l v e s ?

'Transcrip t 4456/27-28 . "Transcrip t 4456/28-30 . Transcrip i 4456/3 5 - 38 . M r Forres t QC appearin g fo r M s Scale s an d Messr s Long , Snowbal l an d Whitweli . adopte d M r Judd' s submission s a t Transcrip t 4456/4 0 - 41 .

"Transcrip t 4457/31 . ''Transcrip t 4457/3 7 - 3 8 .

Pag e 3

Report of the Oil-for-Footi Inquiry 111

T h e C o m m i s s i o n e r ; I ' v e rea d th e d o c u m e n t s , I k n o w p r e c i s e l y w h a t ' s i n

t h e d o c u m e n t s . T h e s u m m a t i o n wil l n o t b e tha t precise , f o r th e v e r y

r e a s o n th e nationa l interes t w o n ' t a l l o w it .

M r L a c a v a ; S o i s i t th e situatio n tha t y o u ' l l b e p e r f o r m i n g , a s i t ' s r e f e r r e d

t o i n a n u m b e r o f t h e authorities , a b a l a n c i n g e x e r c i s e - -

T h e C o m m i s s i o n e r ; No , I ' v e u p h e l d t h e claitn , base d o n th e n a t i o n a l

interest , b e c a u s e o f securit y a n d o t h e r c o n s i d e r a t i o n s . M y intentio n i s tha t

t h e r e wil l b e p u b l i s h e d a d o c u m e n t w h i c h sutTicientl y a n d a c c u r a t e l y

r e f l e c t s th e s u b s t a n c e o f th e materia l i n t h e secre t d o c u m e n t s . W h a t i t wil l

no t d i s c l o s e i s a n y materia l w h i c h w o u l d e n a b l e t h o s e w h o m a y h a v e

a c c e s s t o i t t o d e t e n n i n e f o r w h e n c e i t c a m e o r h o w i t w a s collected .

M r L a c a v a ; W e ' l l r e f l e c t o n w h a t y o u ' v e sai d -

T h e C o m m i s s i o n e r ; S o y o u wil l i n trut h k n o w th e s u b s t a n c e o f t h e

m a t e r i a l m th e d o c u m e n t s . " "

11 . A s a r e a d i n g o f tha t transcrip t m a k e s clear , M r L a c a v a an d 1 w e r e a d d r e s s i n g t h e

s u m m a t i o n o f th e d o c u m e n t s , no t th e q u e s t i o n o f w h e t h e r o r no l th e c l a i m f o r

p u b l i c interes t i m m u n i t y s h o u l d b e u p h e l d . H i s q u e s t i o n r e g a r d i n g th e tas k ! w a s

p e r f o t m i n g a s k e d w h e t h e r , i n p r e p a r i n g th e s u m m a t i o n , [ w o u l d b e p e r f o r m i n g a

b a l a n c i n g e x e r c i s e . M y r e s p o n s e m a d e c l e a r tha t I ha d p a s s e d b e y o n d t h e i s s u e o f

w h e t h e r t h e c l a i m fo r p u b l i c interes t i m m u n i t y s h o u l d b e u p h e l d . T h a t w a s

a d d r e s s e d i n p a r a g r a p h 9 o f m y r e a s o n s . W h a t w a s b e i n g a d d r e s s e d w a s t h e

s u m m a t i o n referre d i n p a r a g r a p h s ! 0 a n d I I o f m y r e a s o n s . T h e p r e p a r a t i o n o f a

s u f f i c i e n t a n d a c c u r a t e s u m m a t i o n o f m a t e r i a l i n t h e secre t d o c u m e n t s i n v o l v e s n o

b a l a n c i n g e x e r c i s e . I t i n v o l v e s a n e x e r c i s e i n a c c u r a c y an d s u f f i c i e n c y ,

12 . I n m y v i e w , t h e r e i s n o b a s i s w h a t s o e v e r f o r s u g g e s t i n g tha t ! di d no t e n g a g e i n a n

a p p r o p r i a t e b a l a n c i n g e x e r c i s e i n d e t e r m i n i n g w h e t h e r I w o u l d u p h o l d th e c l a i m

f o r p u b l i c interes t i m m u n i t y b a s e d o n th e m a t e r i a l i n th e t h r e e secre t a f f i d a v i t s ,

bu t a f t e r c o n s i d e r i n g t h e c o m p e t i n g interes t o f A W B L i m i t e d an d individua l

w i t n e s s e s b e f o r e thi s Inquiry . I n t h e r e a s o n s , I r e f e r r e d t o th e p a g e i n t h e

 Tran.scrip t 4457/4 ! - Transcrip t 4458/21 ,

Pag e 4

112 Report of the Oil-for-Food Inqtiir}/

judgement of Allster v The Queen where that balancing exercise is referred to, 1

would not have done so had I not been engaging in that exercise.

13. Vir Lacava indicated he would "reflect on the matter" and suggested he may wish

to make further submissions. 1 indicated that "if anybody wishes to make any

further submissions in relation to this matter, you are at liberty to do so, but 1

would like to have them in writing al an early time."'''

14.1 have had the advantage of written submissions from Counsel Assisting the

Inquiry, Mr Barker QC, on behalf of Mr Fl¸gge, Mr Judd QC, .Mr Lacava SC, Mr

Forrest QC, Mr Winneke appearing for Rhine Ruhr Pty Limited, and Mr Orr QC

for the Commonwealth. In preparing those submissions, counsel had the original

submissions provided to me by the Commonwealth which where tendered as

exhibit 572.

15. Those appearing for AWB Limited and the individual witnesses have each asked,

on various bases, that 1 should revisit the decision I gave, reverse it, and al least,

give counsel access lo the secret documents.

16. The submissions advanced may be briefly summarised.

17. Mr Lacava's submissions were:

a. I had failed to carry out the balancing exercise required;

b. The Inquiry was obliged to extend procedural fairness to parties

appearing before it. To give a limited number of persons assisting this

Commission access to the secret documents but to deny that access to

counsel for witnesses constituted a departure from procedural fairness;

c. As counsel for witnesses had ethical responsibilities, they should be

pemiitled to see the secret documents after giving, if necessaiy,

appropriate undertakings.

18. Mr Barker s submissions were;

a. Error had occurred because 1 had "expressly declined to follow" the

balancing exercise referred to in Alisier v The Queen;

b. It was wrong to make a decision on the basis of secret statutory

declarations;

c. Legal practitioners are used to maintaining confidences. Thus they

should be entmsted with looking at the secret documents;

" "Transcript 4459/15 - 18.

Page 5

Report of the Oil-for-Food Inquirif 113

d . N o issu e o f p u b l i c interes t i m m u n i t y reall y arose . Tli e issu e c o n c e r n e d

w h e t h e r ther e s h o u l d b e a n e x p a n s i o n o f th e circl e o f p e r s o n s , b e y o n d

s o m e c o u n s e l a n d solicitor s a s s i s t i n g t h e Inquiry , w h o w e r e p e r m i t t e d t o

v i e w th e secre t d o c u m e n t s .

19 . M r F o r r e s t ' s s u b m i s s i o n s w e r e :

a . P r o c e d u r a l f a i r n e s s w a s d e n i e d hi s client s b y m y m a k i n g o r d e r s w i t h o u t

hi s client s h a v i n g b e e n give n th e o p p o r t u n i t y t o pu t s u b m i s s i o n s ;

b . P r o c e d u r a l fairnes s w a s d e n i e d h i s client s b y t h e m " n o t h a v i n g t h e

o p p o r t u n i t y t o loo k a t t h e d o c u m e n t s f o r o u r s e l v e s a n d m a k e

s u b m i s s i o n s " ;

c . T h a t t h e s u m m a t i o n di d no t a d d r e s s distributio n o f th e secre t d o c u m e n t s ;

d . T h e r e ha d bee n a d i f f e r e n t i a l t r e a t m e n t o f witnesses . I f c o u n s e l f o r

vi'itnesse s w e r e no t p e r m i t t e d t o s e e t h e secre t d o c u m e n t s t h e y w o u l d no t

b e a b l e v i g o r o u s l y t o e x a m i n e D F A T w i t n e s s e s .

2 0 . M r J u d d ' s s u b m i s s i o n s w e r e :

a . H i s client s w e r e entitle d t o p r o c e d u r a l fairness . T o a c c o r d s u c h

p r o c e d u r a l f a i r n e s s " t h e tribuna l o r d e c i s i o n m a k e r ( m u s t ) i d e n t i f y t h e

u s e t o w h i c h th e i n f o r m a t i o n i s likel y t o b e p u t an d f o r th e r e s p o n d e n t t o

b e g i v e n th e o p p o r t u n i t y t o a d d r e s s th e e v i d e n t i a r y v a l u e o f th e m a t e r i a l

a n d m a k e i n f o r m e d s u b m i s s i o n s a b o u t h o w tha t e v i d e n c e m a y b e a p p l i e d

o r a s t o w h a t i n f e r e n c e s m a y b e d r a w n f r o m it" ;

b . A s u m m a r y o f t h e secre t d o c u m e n t s wil l no t accor d p r o c e d u r a l f a i r n e s s

b e c a u s e A W B L i m i t e d a n d th e w i t n e s s e s n e e d t o k n o w th e s o u r c e s o f t h e

i n f o r m a t i o n , w h e r e i t w e n t , o r w h o rea d it ;

c . B e f o r e d e t e r m i n i n g t h e issu e o f n o n - d i s c l o s u r e i t w a s n e c e s s a r y f o r m e

first t o d e t e m i i n e " t h e us e t o w h i c h th e d o c u m e n t s m a y b e put" , W i t h o u t

that , a b a l a n c i n g e x e r c i s e w a s no t p o s s i b l e .

2 1 . M r W i n n e k e ' s s u b m i s s i o n s w e r e :

a . T h e d e c i s i o n t o u p h o l d t h e c l a i m f o r n o n d i s c l o s u r e ha d b e e n m a d e

w i t h o u t c o n s i d e r a t i o n o f t h e interes t o f h i s c h e n t , an d t h u s ther e h a d b e e n

a d e n i a l o f p r o c e d u r a l f a i r n e s s ;

b . T h e s u m m a t i o n w a s no t p r o v i d e d unti l a f t e r s o m e w i t n e s s e s h a d b e e n

e x a m i n e d . Tlie y s h o u l d t h u s b e recalled . I t w o u l d b e u n f a i r w e r e t h e y

no t recalle d f o r f u r t h e r e x a m i n a t i o n .

Pag e 6

11 4 Report of the Oil-for-Food Inqtiir}/

22.1 will retum to these submissions in due course.

Subsequent Events

23. At the time I gave my decision it was contemplated the Commonwealth would

provide a public statutoiy declaration, to be in addition to the tlrree secret

affidavits, on which I based my decision. After giving my decision two public

statutory declarations were provided each being by Mr Hammer, the Deputy

Director General of the Office of National Assessments." Each of those statutory

declarations stated that the secret documents "are all highly classified for national

security reasons."" Mr Hammer deposed that he had read and considered the

secret documents, and the three secret statutory declarations. He expressed the

opinion that "publication of the relevant documents or those confidential statutory

declarations would:

a. reduce Australia's intelligence partners' willingness to provide further

information to Australia's intelligence and law enforcement agencies;

and/or

b. compromise sources and methods of intelligence collection

and thereby seriously prqudice Australia's national security, defence, law

enforcement and foreign liaison interests."'^

24. Although il is unusual for a court to allow cross examination of deponents

asserting a claim for public interest immunity, I inquired whether any counsel

wished to cross examine Mr Hammer.'Æ None indicated that they did. His

evidence in support of the claim for public interest immunity is thus unchallenged.

25. The second relevant event, after the date of my giving reasons, was the production

by Counsel Assisting of a summation of the material in the secret documents.

That summation became exhibit 584 and was provided initially to the

Commonwealth on a confidential basis to ensure that it did not disclose any

material which ought not be disclosed in the public interest. A substitute

document which satisfied the Commonwealth's concerns, and which contained

" A third statutory declaration of Mr Hammer (Exhibit 642) was tendered On 23 March 2006, but need not be considered for ihe purpose of these reason.s. Exhibit 573 at [8] and Exhibit 583 at [7].

" Exhibit 583 at [9]. Young I' Ouiri (iSISS) 59 ALR 225 at 228 per Bowen CJ; Ziirro v Ausimlkni Secirriiles Commission (1992) 36 FCR 40 at 44 per Lockhart J, Woodroffii v Naliona! Crime Amlioriiy {W^) 168 ALR 585 at 589 per Dmmmond, Sundberg and Marshall JJ.

Page?

Report of the Oil-for-Food Inquirif 115

onl y niino r amendments , becam e th e exhibi t an d a publi c document . Thu s AW B

Limited , Rhin e Ruh r Pt y Ltd , an d al l witnesses , becam e awar e o f wha t Counse l

Assistin g sai d wa s a summatio n o f th e secre t documents .

26 . I n m y reason s o f 1 4 Marc h 2006, 1 sai d 1 woul d publis h a suminatio n o f th e secre t

document s onc e satisfie d tha t th e summatio n wa s a sufficien t an d adequat e

summatio n o f thos e documents . I a m satisfie d tha t th e substitute d exhibi t 58 4 i s

accurate . 1 wnnld , however , ad d t o th e suminatio n thre e matter s referre d l o i n

paragraph s 2 0 - 2 2 inclusiv e o f M r Hammer' s statutor y declaratio n o f 1 6 Marc h

200 6 (Exhibi t 583) , a s amende d b y me . Althoug h thes e mauer s ar e matter s o f

analysis , the y ar e accurate . Th e thre e additiona l matter s whic h I wil l tak e int o

accoun t i n th e preparatio n o f m y report , ar e th e following ;

(10 ) Althoug h tw o o f th e report s refe r t o Oil-For-Foo d Programm e (OFFP )

corruptio n i n relatio n t o provisio n o f stapl e foods , mos t o f th e report s

refe r t o OFF P corruptio n i n relatio n t o provisio n o f othe r tJTJe s o f

service s o r goods .

(11 ) Onl y on e o f th e fiftee n report s refer s t o wheat . Fiv e o f th e report s refe r

t o conduc t unrelate d t o th e itnpor t o f good s unde r th e OFFP . On e

repor t tha t mention s Ali a refer s t o th e impor t o f product s an d

coinmoditie s l o Ira q i n th e contex t o f th e sanction s regiine . Thre e

repotf s refe r t o bul k good s o r stapl e food s importe d unde r th e OFFP .

Fiv e report s refe r t o al l import s unde r th e OFFP .

(12 ) Althoug h a numbe r o f th e report s refe r t o Alia , th e repor t whic h refer s

t o whea t doe s no t refe r t o tha t cotnpany .

27 . Th e thir d materia l event , sinc e I gav e m y reasons , wa s th e tenderin g o f exhibi t

641 . Tha t documen l indicates , i n relatio n t o paragraph s 1- 8 o f th e summation , th e

distributio n o f th e unassesse d intelligenc e report s insofa r a s tha t distributio n ma y

b e relevan t t o a consideratio n o f th e knowledg e o f th e Cominonweall h o f tha t

unassesse d intelligence . [ a m satisfie d tha t exhibi t 64 1 i s a sufficien t an d accurat e

statemen t o f th e distributio n o f th e unassesse d intelligenc e report s containe d i n th e

secre t documents .

A revie w o f m y decisio n o f 1 4 Marc h 200 6

28. 1 wa s aske d t o revie w an d revers e m y decision . Wer e I t o d o so , i t woul d b e

necessar y fo r m e no w t o conside r th e continuin g clai m o f th e Commonwealt h fo r

P a g e s

116 Report of the Oil-for-Food Inqtiir}/

public interest immunity based on the unchallenged evidence of Mr Hanuner that

disclosure of the documents, or of the three secret affidavits, would harm the

national interest, in that it would:

a. reduce Australia's intelligence partners' willingness to provide further

infonnadon to Australia's intelligence and law enforcements agencies;

and

b. compromise sources and methods of intelligence collection and thereby

seriously prejudice Australia's national security, defence, law

enforcement and foreign liaison interests.

29. That material would then form the basis for the making of protective orders,

subject to a consideration of the effect of such orders on the interest of AWB

Limited, Rhine Rulir Pty Ltd, Alkaloids of Australia Pty Ltd and witnesses before

the Inquiry. However, those companies and persons now know both the substance

of the documents in respect of which protection from publication is sought, and

know the distribution of such documents. All that they do not know is from

whence the information came and how it was obtained.

30. In rny view, the balancing exercise required by the auihonties would resuh in an

order being made in tenns identical, or not dissimilar, lo lhal which I made on the

14 March. Whatever may have been the situation on 14 March, all companies or

persons likely to be adversely affected by protective orders against discU)sure

made in the national interest, have now had the opportunity to place before me all

submissions they wished to make. Each has had a chance to consider the

submission of the Commonwealth and the public affidavits in support of the

application. Each knows the substance of the documents and their distribution.

31. In my view, the provision of a sufficient and accurate summary of the substance

of the documents, together with a sufficient and accurate summary of the

distribution of those documents to relevant officers within the Commonwealth,

protects the interest of AWB Limited, Rhine Rulir Pty Limited, Alkaloids of

Australia Pty Ltd and witnesses appearing before the Inquiry to the greatest extent

possible consistent with the protection of the national interest in not disclosing

documents which would seriously prejudice Australia's national security, defence,

law enforcement and foreign liaison interests.

Page 9

Report of the Oil-for-Food Inquirif 117

Subinission s o f Counse l Opposin g th e Orde r

32 . Th e submission s o f .A.\VT 3 Limited , an d others , see m t o m e t o misunderstan d tli e

position . Th e Inquir y issue d noticc s t o th e Australia n Intelligenc e Communit y t o

produc e certai n documents . The y wer e produce d t o th e Inquir y o n th e basi s tha t

inspectio n o f th e docuinent s wa s limite d t o certat n persons . N o issu e o f productio n

t o th e Inquiry , o r th e us e whic h Ih e Inquir y tnigh t mak e o f th e infonnatio n i n th e

materia l produced , arose . However , becaus e o f th e sensitivit y o f th e materia ! fro m

a naliona l securit y viewpoint , th e Commonwealt h o n behal f o f th e Australia n

Intelligenc e Communit y sough t a n orde r restrictin g acces s t o th e document s

beyon d som e o f thos e assistin g th e Inquiry . Th e ground s fo r makin g suc h a n orde r

pursuan t t o s 6 D o f th e Royal Commissions Act ¡902 wa s publi c interes t

imniuiiity . Tli e Commonwealth' s submissio n state d {a t paragrap h 13) ;

" Th e publi c interes t relie d o n b y th e Commonwealt h i n seekin g direction s

unde r s 6 D o f th e Royal Commissions Act ¡902 i s th e sam e a s tha t whic h

woul d b e relevan t i n a clai m fo r publi c interes t immunit y and/o r fo r no n

publicatio n o f nationa l securit y information . Therefore , lega l principle s

relatin g t o thes e issue s ar e instructiv e i n determinin g whethe r th e direction s

sough t b y th e Commonwealt h shoul d b e made. "

33 . Th e issu e I ha d t o addres s wa s litis ; whethe r I shoul d i n th e exercis e o f discretio n

pursuan t t o s 6 D tnak e th e orde r restrictin g acces s l o th e documents . I woul d d o s o

onl y i f I wa s satisfie d tha i th e clai m fo r publi c interes t immunit y wa s established .

Tha t wa s th e groun d advance d fo r th e makin g o f suc h order . Accordingly , 1

considere d th e matte r havin g regar d t o th e factor s traditionall y addresse d i n a

clai m fo r publi c interes t immunity . Bein g satisfie d tha t th e clai m wa s estabhshed ,

1 mad e th e orde r pursuan t t o s 6D . Th e orde r wa s no t mad e i n th e simpl e exercis e

o f discretion ; i t wa s a n orde r mad e i n exercis e o f discretio n grounde d upo n th e

clai m fo r publi c interes t immunity , whic h I foun d established , Thi s wa s mad e

clea r i n th e followin g exchange :

" M r Judd ; Well , I understand , sir , tha t th e basi s o f th e rejectio n i s no t s o muc h

th e publi c interes t immunity , bu t it' s i n th e exercis e o f discretio n t o maintai n

th e confidentialit y o f thes e docutnent s unde r 6D .

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The Commissioner: Not at all. The order 1 made was pursuant to section 6D,

but 1 made it because I upheld the claim for public interest iinmunity."''

Failure to perform the balancing exercise^"

34. i have addressed this matter above.

Absence of Procedural Fairness^'

35. It was contended that there had an absence of procedural fairness because:

a. It was procedurally unfair to give access to the secret docuinents to some

persons assisting the Inquiry, but not counsel for AWB Limited, or

counsel for witnesses;

b. Of failure to give counsel for witnesses an opportunity to put

submissions prior lo making the orders;

c. Of failure to identify the use to which the information in the secret

documents was likely to be put in order to permit informed submissions

about how the evidence may be applied or as to what inferences may be

drawn from it;

d. AWB Limited and witnesses did not know the sources of information in

the sutnmary of such documents, nor to whom they were distnbuted or

who read them; and

e. The decision to uphold the claim for public interest iinmumty had been

made without consideration of the interest of Rhine Rulir Pty Ltd.

36. As indicated, the interests of companies and persons appearing before the Inquiry

were considered when undertaking the balancing exercise in determining the

public interest immunity claim. Whilst submissions were not received from

counsel for such companies and persons, that was because I recognised, in

paragraph 9, that absent access to the secret affidavits supporting the application,

there was little that such counsel could advance. As 1 said: "counsel appearing for

AWB Limited and witnesses are unable adequately to address argument to me as

to why such orders should not be made."'^

37.1 recognised, and took into account, that disadvantage, and the interests of those

persons. Having now seen the public affidavits of Mr Hammer in support of the

application, the submissions of those opposing the making of the order make plain

" Transcript 4885/41 - Transcript 4886/1. Refer to [17(a)] and [18(a)l above. ' Refer to [17(b)j, [19(a) - (b)], [20(a)- (b)] and [21(a)] above. ' Reasons, 14 March 2006 at [9],

119 Report of the Oil-for-Food Inqtiir} /

tjia t ther e i s stil ! httl e tha t the y ca n pu t i n oppositio n l o th e mailin g o f th e orde r

excep t t o poin t t o th e disadvantag e t o thei r chent s resultin g fro m th e makin g o f Ih e

order . I understoo d an d recognise d tha t disadvantag e prio r t o th e makin g o f th e

order , an d referre d t o i t i n paragrap h 9 o f m y reasons .

38 . I t wa s contende d tha t fo r ther e t o b e procedura l fairness , i t wa s firs t necessar y fo r

th e decisio n make r t o identif y th e us e t o whic h th e protecte d matena l migh t b e

put , o r inference s whic h migh t b e draw n fro m it . Wit h du e respect , tha t us e i s

apparent . Th e secre t materia l i s unassesse d intelligenc e hel d b y certai n arm s o f

th e Australia n Intelligenc e Community . A s m y reason s mad e clea r (a l paragrap h

11) , i t wa s alway s intende d tha t a n adequat e an d accurat e suinmatio n o f tha t

materia l woul d b e published . I t wa s m y intentio n tha t tha t summatio n woul d

disclos e i n summar y fon n bot h th e substanc e o f th e information , an d t o whom ,

relevantl y t o thi s Inquiry , t l wa s distributed . Tha t ha s bee n don e i n tw o

docuinent s whic h becam e exhibit s 58 4 an d 641 . I t i s materia l whic h wil l b e

considere d i n makin g an y nccessar y determinatio n concernin g an y relevan t

knowledg e o f th e Commonwealth . Bein g awar e o f tha t whic h wa s containe d i n

th e secre t documents , bot h a s t o conten t an d distribution , 1 wa s i n a positio n t o

perfor m th e balancin g exercis e require d b y th e authorities , an d di d perfor m tha t

exercise . A s th e substanc e an d distributio n o f th e secre t matena l i s no w know n t o

companie s an d person s appearin g befor e th e Inquiry , the y ar e abl e t o pu t suc h

submission s a s the y conside r appropriat e regardin g th e us e l o b e mad e o f thi s

material , o r an y inference s availabl e l o b e draw n fro m it ,

39 . I d o no t accep t tha t ther e i s an y procedura l unftimes s t o person s appearin g befor e

th e Inquir y becaus e the y ar e unawar e o f th e source s o f th e information . I f i t b e

tha t companie s o r person s appearin g befor e thi s Inquir y ar e disadvantage d b y no t

knowin g o f th e sourc e o f th e secre t inforrnation , no w publishe d t o them , tha t

arise s becaus e th e nationa l interes t s o requires . An y disadvantag e t o thet n i s

minimise d b y publicatio n o f th e subjec t inatte r o f th e secre t information , an d it s

distribution .

40 . Regardin g M r Winneke' s contentio n tha t th e summatio n ha d no t bee n provide d

unti l afte r witnesse s lia d bee n examined , suc h witnesse s hav e bee n recalle d fo r

furthe r examination . Thi s becam e necessar y becaus e m y expectatio n tha t th e

Commonwealt h woul d produc e th e summatio n o f th e substanc e an d distributio n o f

th e secre t document s promptl y di d no t occur . An y disadvantag e t o companie s o r

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person s appearin g befor e th e Inquir y ha s bee n overcom e b y recaUin g tli e

witnesses .

41 . Th e remainin g submission , advance d b y M r Barker , bu t adopte d b y som e others ,

wa s that , a s lawyer s ar e ethica l people , boun d b y ethica l responsibilities , an d use d

t o maintainin g confidences , i t wa s wron g t o exclud e the m fro m acces s l o th e

secre t documents . Tha t wa s panicularl y s o a s som e counse l an d solicitor s

assistin g thi s inquir y ha d bee n pennitte d t o se e them . Th e issu e wa s no t reall y

publi c interes t iinmunity , bu t rathe r a widenin g o f th e circl e o f person s wh o migh t

hav e acces s t o th e documents .

42 . Declinin g t o gran t counse l o r solicitor s acces s t o document s i n respec t o f whic h

th e Commonwealt h claim s publi c interes t immunit y base d upo n nationa l securit y

concerns , doe s no t impl y an y lac k o f confidenc e i n thos e counse l o r solicitors , no r

doe s i l cal l i n questio n thei r integrity . I f th e submissio n advance d wer e t o b e

upheld , i t woul d b e rar e indee d tlia t an y clai m fo r pubh c interes t immunit y

grounde d upo n nationa l securit y concern s coul d eve r b e upheld ; ye t frequentl y

suc h claim s ar e upheld . Wher e th e nationa l interes t predominate s ove r th e privat e

interest , th e nationa l interes t require s tha t th e poo l o f person s t o who m th e

document s b e disclose d b e minimise d t o th e greates t exten t possible . I n Traljesic

V Attorney-Genera! of the Commonwealth of Australia}^ Rare s J recentl y referre d

wit h approva l t o th e passag e from th e judgemen t o f Wilco x J \ ri Jackson v Wells,'''

wher e hi s Honou r said :

"Thirdly , M r Robert s suggeste d tha t i f I wer e no t dispose d t o gran t acces s

t o th e subjec t materia l t o th e parties , I shoul d a t leas t gran t acces s t o th e

lega l representative s t o th e parties . I gav e thi s submissio n anxiou s

consideration . I t wa s a cours e apparentl y considere d b y th e Hig h Cour t i n

Alister [ v The Queen (1984 ) 15 4 CL R 404] , althoug h ultimatel y no t

adopted . A s I hav e indicated , I woul d hav e welcome d th e assistanc e o f

counse l upo n th e conten t o f th e documents . Th e applicant s would , n o

doubi , hav e fel t mor e satisfie d tha t th e document s wer e rigorousl y

examine d b y th e cour t i f thei r counse l ha d bee n give n th e opportunit y t o

tak e th e cour t tliroug h th e documents . But , i n th e end , 1 rejecte d th e

(1985 ) 5 FC R 29 6 a l 30 7 - 30 8 pe r Wilco x J referre d t o i n Traljesic v Atrorrey-Ceiieral of the Commonwealth of Australia [2006 ] FC A 12 5 a t [23 ] pe r Rare s J .

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Report of the Oil- for- Footi Inquiry 1 2 1

proposal . I t involve s a numbe r o f problems . Withou t reflectin g m an y

wa y upo n th e integrit y o f an y counse l o r solicitor , difficultie s ar e likel y l o

aris e wher e counse l appearin g in , an d advisin g thei r client s i n respec t of ,

protracte d an d comple x proceedings , acquir e informatio n whic h the y ar e

no t fre e t o us e o r pas s o n t o thei r clieiits . Durin g th e hea t o f battl e a n

unwittin g disclosur e ma y occur . Fran k an d ful l advic e become s

impossible . 1 a m awar e o f case s i n which , fo r reason s suc h a s these ,

experience d counse l hav e decline d t o receiv e infonnatio n whic h the y ar e

no t fre e t o shar e wit h thei r clients . I t seem s t o m e merel y coinmonsens e t o

conclud e tha t th e fewe r peopl e wh o hav e acces s t o confidentia l

infomiatio n th e les s i s th e risk o f unauthorise d disclosure . Weighin g th e

assistanc e likel y l o b e obtaine d fro m counsel' s submission s agains t th e

sensitivit y o f th e matenal , i t seeme d bette r no t t o acced e t o M r Robert' s

suggestion. "

43. 1 respectfull y agree . I n thi s instance , whils t denyin g acces s t o th e docutnent s t o

counsel , solicitor s an d thei r clients , I wa s abl e t o satisf y mysel f regarding , an d

mak e public , a sufficien t an d accurat e summatio n o f th e materia l i n tli e

documents , an d thei r distribution . Thus , I a m no t denie d th e advantag e o f

counsel' s submission s regardin g thos e documents , ye t th e circl e o f person s wit h

knowledg e o f Ih e sourc e o f th e infonnatio n an d it s metho d o f collectio n remain s

restricte d i n th e nationa l interest .

44 , Th e remainin g submissio n wa s tha t o f M r Forres t wh o contende d ther e ha d bee n a

differentia l treatmen t o f witnesses . I disagree . Al l witnesse s hav e bee n

thoroughl y an d competentl y examine d b y Counse l Assisting . Th e examinatio n o f

som e witnesse s ha s bee n shorte r becaus e the y hav e provide d mor e complet e

statement s regardin g materia l matters , 1 als o rejec t th e contentio n tha t counse l

appearin g fo r witnesse s ar e unabl e adequatel y t o examin e DFA T witnesse s

becaus e the y wer e no t permitte d t o se e th e secre t documents . Insofa r a s an y suc h

examinatio n ma y b e permitted , suc h counse l hav e th e summatio n o f bot h th e

conten t an d distributio n o f th e secre t material." '

" Refe r t o s 6F A o f th e Roval Commissions Act 1902 (Cth ) an d Practic e Not e No . 1 , 8 Decembe r 200 5 a t [ 7 ] .

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Order s

45 . Fo r th e reason s given , 1 a m o f th e vie w tha t th e decisio n give n o n 1 4 Marc h wa s

correct . 1 declin e t o revok e it .

46 . However , fo r th e avoidanc e o f doubt , an d havin g no w receive d ful l subtnission s

fro m Counse l Assisting , counse l fo r th e Commonwealt h o n behal f o f th e

Australia n Intelligenc e Community , counse l fo r AW B Limited , Rhin e Ruh r Pt y

Lt d an d witnesse s appearin g befor e thi s Inquiry , suc h submission s bein g receive d

frot n counse l wit h thei r havin g th e advantag e o f knowledg e o f th e substanc e o f th e

secre t documents , an d thei r distribution , I toda y mak e a furthe r orde r i n term s

identica l t o tha t mad e o n 1 4 Marc h 2006 .

3 0 Marc h 200 6

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Report of the Oil- for- Foot i Inquiry 1 2 3

Appendix 10 Administration of the

Inquiry

Establishment

The Inquiry was established by Letters Patent issued by the Governor-General on 10 November 2005 and was given the powers conferred by the Royal Commissions Act 1902. The initial reporting date was 31 March 2006. The Commissioner commenced his investigation immediately upon receiving his Letters Patent.

The Executive Officer to the Inquiry, Ms Sheila Butler, was appointed by the Attorney-General's Department on 14 November 2005. As the senior official, she was responsible for all budgetary and administrative matters relating to the Inquiry, including liaison with the Attorney-Geiieral's Department and the Department of the Prime Minister and Cabinet.

On 15 November 2005 the Attorney-General issued a legal services direction under s. 55ZF(l)(b) of the Judiciary Act 1903, directing 'that Legal work as solicitors assisting the Commission of Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme established on 10 November 2005 is tied to the Australian Government Solicitor'.

At the time it was established the Inquiry had no budget allocation, premises or staff. Under the current Commonwealth Administrative Arrangements Orders the Prime Minister has responsibility for the Royal Commissions Act, but administrative support for commissions of inquiry is provided by the Attorney-General's Department. Accordingly, the Attorney-General's Department took the initial steps to set up the Inquiry until the Executive Officer was appointed; it continued to provide support through a number of corporate services areas, including the negotiation of budgetary requirements with the Department of Finance and Administration.

Accommodation

The Attorney-General' s Department was immediately able to locate suitable long-term office accommodation on level 19 of 55 Market Street, Sydney. It was fortuitous that this space was available in the same building as the Administrative Appeals Tribunal,

whose hearing rooms were to be used by the Inquiry. Since the premises would not be available until early December and a small amount of fit-out and construction work was required, interim accommodation had to be found. In the first instance the

125 Report of the Oil-for-Food Inqtiir} /

Commissione r wa s provide d wit h a n offic e a t th e Centra l Registr y o f th e

Administrativ e Appeal s Tribuna l

AG S Sydney , appointe d solicitor s t o th e Inquiry , wa s abl e t o mak e som e relativel y self-containe d spac e availabl e i n it s premise s a t 13 3 Castlereag h Street , Sydney . Th e Inquir y occupie d th e office s an d use d AG S suppor t service s o n a cost-recover y basi s

fo r th e shor t perio d required . Th e arrangement , whil e unavoidabl e i n th e

circumstances , wa s no t conduciv e t o a smoot h an d eas y start-u p fo r th e Inquir y team .

Counsel , solicitor s an d paralegal s wer e engage d withi n a shor t time : limite d spac e i n th e temporar y are a necessitate d som e officer s bein g locate d o n othe r floor s o f th e buildin g an d othe r personne l havin g t o us e inappropriat e offic e facilitie s adjacen t t o th e Commissioner' s office . Th e Inquir y operate d fro m AG S premise s betwee n 1 7 Novembe r an d 1 3 Decembe r 2005 .

Th e Inquir y too k ove r it s long-ter m offic e spac e o n 5 Decembe r 2005 . I n th e followin g wee k th e offic e wa s cable d fo r voic e an d dat a service s an d servers , an d PC s an d a telephon e syste m wer e installed . Thi s wor k wa s undertake n b y a tea m fro m th e Attorney-General' s Departmen t Informatio n an d Knowledg e Service s Division , unde r

th e directio n o f th e Inquiry' s Executiv e Officer . Modification s wer e mad e t o th e existin g offic e fit-ou t t o construc t suitabl e office s fo r th e Commissione r an d Senio r Counse l an d t o remov e exces s wor k stations ; otherwis e th e existin g fit-ou t wa s used .

Al l additiona l offic e furnitur e wa s hire d t o avoi d a larg e capita l outla y an d th e subsequen t problem s o f disposa l a t th e conclusio n o f th e Inquiry .

O n 1 3 Decembe r 200 5 th e Inquir y wa s abl e t o mov e int o it s ow n premises . Th e spac e occupie d wa s som e 67 8 squar e metre s lease d a t a cos t o f $53 5 pe r squar e metr e — a sufficien t are a t o accommodat e th e staf f an d provid e adequat e storag e fo r th e quantit y o f document s subsequentl y received . Fortunately , th e leas e o n thes e premise s wa s abl e t o b e extende d mont h b y month .

Throughou t th e Inquiry , entranc e t o th e tenanc y wa s restricte d t o pas s holders :

visitor s wer e greete d a t th e doo r an d escorte d o n th e premises . A vide o surveillanc e camer a wa s installe d t o monito r entrance s t o th e office . Ther e wer e n o instance s o t breache s o f o r threat s t o security .

Profil e o f th e Inquir y

Resource s require d t o conduc t th e Inquir y wer e estimate d o n th e basi s o f th e Inquiry' s expecte d duratio n an d th e scop e o f th e origina l term s o f reference . I n additio n t o th e Executiv e Office r an d a researc h associat e fo r th e Commissioner , provisio n wa s mad e t o appoin t fou r counse l an d a tea m o f fou r solicitors . Paralega l an d administrativ e

suppor t staf f wer e als o recruited . Number s fluctuate d slightl y an d som e personne l change d ove r th e cours e o f th e Inquiry , bu t 2 0 wa s th e maximu m numbe r o f peopl e engage d ful l tim e a t an y point . Thi s leve l wa s reache d i n Februar y 200 6 an d wa :

largel y sustaine d unti l th e en d o f Jun e 2006 , whic h matche d th e timin g o f th e mai n

1 2 6 Report of the Oil-for-Food Inqtiir}/

block of hearings. Despite several extensions of time, the Inquiry was largely able to maintain its core staff throughout the period. A list of people who were attached to the Inquiry for all or part of the period is at Table 10.1.

Counsel Assisting

In appointing Counsel Assisting, an effort was made to form a team of experienced barristers who possessed a range of skills and expertise relevant to the areas of investigation and law the Inquiry was likely to encounter. A list of suitable candidates was drawn up in consultation with the Attorney-General's Department: the time frame prevented any public call for applications or expressions of interest.

On the Commissioner's recommendation, the Attorney-General, acting under s. 6FA of the Royal Commissions Act 1902, appointed the following people as Counsel Assisting:

´

´

John Agius SC

Gregory Nell SC

Michael Wigney

Miles Condon.

All counsel came from the New South Wales Bar and had a range of expertise * including criminal, corporations, commercial, administrative and maritime law and previous experience on commissions of inquiry. Mr Agius was appointed Senior Counsel Assisting the Inquiry. Mr Nell was made Senior Counsel during 2006.

By 25 November 2005 all counsel had taken up their appointment and were retained throughout the Inquiry.

Terms of engagement for Counsel Assisting were negotiated by the Civil Justice and Legal Services Division of the Attorney-General's Department, in accordance with the approved fee structure for the engagement of counsel by the Commonwealth.

The role of Counsel Assisting was to conduct the specific investigations, select the matters that were presented in the hearing room, and call and examine relevant witnesses. Counsel Assisting also presented submissions concerning the findings they considered were established by the material presented to the Inquiry. Further, they provided advice on questions of law and practice as they arose. Most of the work performed by Counsel Assisting was conducted outside the hearing room. For efficient resource use it was decided to run with a principal hearing room team consisting of Mr Agius and Mr Condon. On some occasions this was varied according

to the matters under consideration: Mr Wigney led the examination of matters relating to knowledge of the Commonwealth; Mr Nell handled matters relating to BHP and Tigris Petroleum.

127 Report of the Oil-for-Food Inqtiir} /

Table 10.1 Inquiry personnel

The Inquiry team

Sheila Butler Executive Officer

John Agius SC Senior Counsel Assisting

Gregory Nell SC Counsel Assisting

Michael Wigney Counsel Assisting

Miles Condon Counsel Assisting

Glenn Owbridge Solicitor Assisting

Stephen Vorreiter Senior Solicitor

George Kamencak Senior Solicitor

Alice Potion Senior Solicitor

Kristy Alexander Senior Solicitor

Asaf Fisher Associate/Research Assistant

Rick Willis Media Liaison

John Sidoti Paralegal

Alexandra Smith Paralegal

Julia Riley Paralegal

Michael Lanigan Paralegal

Sharna Clemmett Paralegal

Grace Jiang Paralegal

Sarah Carrcdus Paralegal

Julia Hvistendahl Paralegal

Ivan Leong Paralegal

Diana Kondilios Executive Assistant

Eva Papadopoulos Clerical Assistant

Denise Sippel Clerical Assistant

Anna Granger Clerical Assistant

Australia *key personnel

Bruce Grant Director

Rebecca Grant Project Director

Matthew Schultz Project Manager

Yian Sun Technical Support

Mario Rodriguez Paralegal

Sally Hicks Computer Reporters Pty Ltd

Mandy Ferguson Computer Reporters Ply Ltd

AGD technical support team

Tony D'Amico

Adam Reis

Manh Nguyen

Geoff Thornthwaite

Editorial and design team

Chris Pirie Comprehensive Editorial Services

Debbie Phillips DP Plus

Ray Sharpe Rayzor Sharpe Designs

128 Report of the Oil-for-Food Inqtiir} /

Solicitors assisting the Inquiry

After consideration of any potential conflicts of interest, the Australian Government Solicitor was appointed by the Attorney-General to provide legal services to the Inquiry, AGS is a government business enterprise that operates on a fully commercial basis. It is one of Australia's largest law firms and a leading provider of legal and

related services to Australian government agencies and departments. It was agreed that the provision of services would be managed by the Sydney office of AGS. The Inquiry indicated that it would need a team that included four experienced lawyers as well as a senior paralegal or junior lawyer to act as the Commissioner's research assistant and associate. To ensure continuity, AGS was also asked to provide a person to act as the Commissioner's executive assistant. A short list of candidates was provided and brief interviews were conducted by the Commissioner and the Executive Officer before final selections were made.

The legal team that commenced with the Inquiry was led by Mr Glenn Owbridge, a senior executive lawyer from AGS Brisbane. The others were senior and junior lawyers from the Sydney office and one senior lawyer from the Melbourne office. Over the course of the Inquiry there were several changes in personnel, and for the latter half of the Inquiry the team was reduced to three lawyers in total. Terms of engagement, which included hourly rates (subject to a daily cap) and, where necessary, conditions for reunion travel and accommodation in Sydney, were negotiated between the Executive Officer and AGS. The need, in a couple of instances, to engage interstate lawyers added to the overall cost. Once agreed, rates and conditions remained constant for the duration of the Inquiry.

The role of the solicitors was focused on issuing notices to produce documents and summonses and providing assistance with the preparation of witness statements. As instructing solicitors, their role included the discovery of evidence and obtaining, analysing and preparing material to be presented by Counsel Assisting. The solicitors

were the main point of contact with the Inquiry for the legal representatives of the companies covered by the terms of reference and other witnesses summonsed to appear. Solicitors also assisted counsel in the preparation of their submissions on matters arising from the hearings.

The Commissioner's associate was also part of the AGS team, flis function was to:

carry out research under the Commissioner's direction

draft discussion papers

disseminate the Commissioner's directions

attend all hearings

manage the exhibits

129 Report of the Oil-for-Food Inqtiir} /

 participat e i n th e analysi s o f submission s mad e t o th e Commissione r b y Counse l Assistin g an d other s

 assis t i n th e preparatio n o f th e repor t an d manag e a proces s t o ensur e reference s an d endnote s wer e accurate .

O n tw o occasion s durin g th e Inquir y AW B Limite d initiate d lega l actio n i n th e Federa l Cour t o n matter s relatin g t o lega l professiona l privilege . Th e Commissione r wa s a responden t t o th e proceeding s bu t o n bot h occasion s chos e t o ente r a submittin g appearance . A s fa r a s wa s necessary , AG S Melbourn e represente d th e Inquir y i n thes e proceedings . Th e Inquir y als o briefe d Lindsa y Foste r S C an d D r Jame s Renwic k o n a particula r matte r relatin g t o th e Federa l Cour t proceedings .

AG S als o provide d som e limite d ancillar y researc h an d advisor y services .

Paralega l an d administrativ e suppor t

Suppor t staf f fo r th e Inquir y wer e recruite d throug h Flay s Personne l Service s (Australia ) Pt y Ltd , a privat e employmen t agency . Recruitin g temporar y staf f throug h a n agenc y avoide d drawn-ou t selectio n processe s an d allowe d th e flexibilit y t o var ) th e numbe r o f staf f accordin g t o demand . Th e Executiv e Office r wa s responsibl e fo i th e recruitmen t o f al l suppor t staff .

Th e lega l tea m wa s supporte d b y a grou p o f paralega l staff . Whil e th e siz e o f th e grou p fluctuate d durin g th e Inquiry , a cor e o f fiv e paralega l staf f wer e general! } required . I n mos t instance s th e paralegal s ha d complete d la w degrees , an d som e ha d bee n admitte d t o practice . Thei r function s include d researc h an d analysis , assistanc e wit h th e compilatio n o f witnes s bundle s an d exhibit s fo r hearings , an d maintenanc e o f

th e Inquiry' s records . Durin g th e preparatio n o f submission s an d draftin g o f th e report , th e paralegal s wer e taske d wit h searchin g th e evidenc e i n relatio n t o particula r matter s an d witnesse s fo r th e consideratio n o f counse l an d checkin g al l reference s t o transcript , submission s an d exhibit s an d othe r document s an d authoritie s cited .

I n additio n t o th e Commissioner' s executiv e assistant , wh o als o acte d a s th t administrativ e assistan t t o th e Executiv e Officer , tw o clerica l assistant s wer e engage r fo r th e greate r par t o f th e Inquiry . Thei r function s include d genera l wor d processing , an d formattin g o f document s fro m audi o tape s o r handwritte n drafts , typin g th e fina ' report , copyin g an d assemblin g witnes s bundle s an d referenc e material , maintainin g th e hearin g room , an d receptio n duties .

Th e executiv e assistan t manage d th e Commissioner' s offic e an d provide d secretaria l suppor t t o othe r senio r staf f a s required . A s par t o f he r duties , sh e manage d incomin g an d outgoin g mail , purchase d stationer y an d stores , acte d a s th e coordinato r an d poin t o f contac t fo r servic e providers , an d prepare d invoice s rendere d o n th e Inquir ; fo r paymen t b y th e Attorney-General' s Department .

1 3 0 Report of the Oil-for-Food Inqtiir} /

Hearing s

A direction s hearin g wa s hel d o n 1 2 Decembe r 200 5 a t th e Famil y Cour t o f Australia , 97-9 9 Goulbur n Street , Sydney . Subsequentl y al l publi c hearing s wer e hel d a t leve l 5 , 5 5 Marke t Street , Sydney , i n Hearin g Room s 1 an d 2 o f th e Administrativ e Appeal s Tribunal .

Fo r th e purpose s o f th e Inquir y th e tw o room s wer e opene d int o on e space . Th e hearin g roo m furnitur e wa s reconfigure d int o a court-lik e arrangement . A n elevate d benc h wa s constructe d fo r th e Commissione r an d a raise d witnes s bo x wa s installed .

Seatin g fo r th e publi c an d th e medi a wa s provide d a t th e rea r o f th e hearin g room .

Ful l electroni c facilitie s wer e installed , enablin g th e privat e an d publi c displa y o f document s an d a vie w o f real-tim e transcript . A cour t operato r an d transcrip t writer s wer e presen t a t al l hearings .

A t th e inceptio n o f th e Inquir y a relativel y shor t perio d o f hearing s wa s foresee n an d th e facilitie s wer e considere d adequat e fo r th e purpose . I n th e event , severa l factor s combine d t o reduc e th e suitabilit y o f th e hearin g rooms :

 Hearing s ra n fo r ove r 1 4 weeks , wit h a three-mont h brea k betwee n Ma y an d August . Durin g thi s brea k th e hearin g roo m ha d t o b e dismantle d an d the n reconstructed .

 Th e numbe r o f peopl e authorise d t o appea r quickl y exceede d expectations , makin g i t necessar y fo r barrister s an d thei r instructin g solicitor s t o wor k a t crowde d ba r tables , wit h littl e spac e fo r briefcase s an d papers .

Publi c an d medi a interes t wa s high , an d seatin g spac e wa s a t a premiu m — especiall y o n day s whe n ther e wer e high-profil e witnesses .

 Facilitie s wer e stretche d t o th e extrem e whe n thre e governmen t Ministers , includin g th e Prim e Minister , wer e calle d t o giv e evidence . Additiona l securit y measure s an d personne l ha d t o b e arrange d a t th e buildin g entrance s an d o n th e hearin g roo m storey . I t wa s necessar y t o institut e procedure s fo r crow d contro l an d manage d acces s t o th e hearin g room . Audi o an d visio n feed s wer e require d i n a n additiona l hearin g roo m t o cate r fo r th e overflo w o f attendees .

Althoug h thi s las t situatio n migh t hav e occurre d whateve r th e locatio n o f th e hearings , th e 'make-do ' arrangement s i n th e hearin g room s wer e detrimenta l t o th e Inquiry' s operations . I n simila r circumstance s i n th e future , consideratio n shoul d b e

give n t o th e advantage s an d efficienc y o f constructin g a purpose-buil t hearin g roo m tha t i s appropriatel y wire d an d furnishe d an d availabl e fo r th e duratio n o f a n inquiry .

Report of the Oil- for- Foot i Inquiry 1 3 1

Record s managemen t

Th e Inquir y receive d document s i n respons e t o notice s t o produce , a s genera l correspondence , o r a s submission s fro m variou s sources . Document s wer e receive d a s har d cop y o r electronicall y o r i n bot h forms . Al l document s wer e hel d a t th e Inquiry' s premises .

Al l document s receive d b y th e Inquir y wer e processe d i n a simila r fashion . Origina l document s receive d b y th e Inquir y wer e routinel y barcode d (pag e b y page) , scanne d electronically , objectivel y coded , an d entere d int o a searchabl e electroni c database .

Origina l document s wer e the n store d securel y an d generall y wer e no t use d i n day-to -da y business . A t th e conclusio n o f th e inquiry , al l origina l propert y wa s returned .

Specia l measure s wer e introduce d t o ensur e th e securit y o f an y classifie d materia l receive d fro m th e Departmen t o f Foreig n Affair s an d Trad e an d othe r governmen t sources . Som e 121,00 0 document s wer e hel d i n th e Inquiry' s database .

Al l incomin g an d outgoin g correspondenc e wa s logged , notin g th e dat e o f receip t an d response , an d filed . Correspondenc e receive d electronicall y wa s printe d t o pape r an d filed .

I n accordanc e wit h th e provision s o f th e Roya l Commission s Ac t an d th e Archives Act 1983 , th e Inquiry' s record s wer e passe d t o th e Departmen t o f th e Prim e Ministe r an d Cabine t an d th e Nationa l Archive s o f Australi a a t th e conclusio n o f th e Inquiry .

Litigatio n suppor t

I n Decembe r 200 5 Australi a Pt y Lt d wa s appointe d provide r o f litigatio n support , t o establis h an d maintai n a n electroni c databas e fo r processin g document s produce d t o th e Inquir y an d t o operat e a n 'electroni c court ' fo r th e hearings . Tim e di d no t allo w th e conduc t o f eve n a limite d tende r process , s o a 'direc t source ' approach , i n lin e wit h th e Commonwealth' s Procuremen t Guidelines , wa s followed . Th e compan y ha s extensiv e experienc e i n providin g simila r service s t o numerou s governmen t inquirie s — includin g th e HI H Roya l Commissio n an d th e Roya l Commissio n int o th e Buildin g an d Constructio n Industr y —an d wa s abl e t o offe r th e ful l rang e o f service s a t rate s tha t represente d valu e fo r money . Th e Attorney -General' s Departmen t approve d a contrac t wit h o n a fee-for-servic e basi s agains t a fixe d transactio n fe e schedul e an d individua l hourl y consultanc y rates .

Wor k fo r th e Inquir y wa s carrie d ou t eithe r o n sit e o r a t ' s premises . Service s provide d included :

 barcoding , scannin g an d objectivel y codin g al l document s receive d b y th e Inquir y an d providin g prin t set s a s require d

 loadin g document s ont o a searchabl e electroni c databas e {Summation iblaze) fo r us e b y Inquir y officer s

1 3 2 Report of the Oil-for-Food Inqtiir} /

postin g copie s o f exhibit s tendere d i n evidenc e o n th e Inquiry' s websit e o n a dail y basi s

settin g u p a n electroni c cour t boo k (Transcrip t Analyser/Brie f Analyser ) fo r documen t retrieva l an d displa y i n hearing s an d providin g cour t operator s t o perfor m tha t functio n durin g hearing s

establishin g a n FT P sit e fo r disseminatio n an d receip t o f submission s o f counse l an d submission s i n repl y fro m othe r partie s

preparin g th e Inquiry' s electroni c databas e fo r transfe r t o th e Nationa l Archive s an d th e Departmen t o f th e Prim e Ministe r an d Cabine t a t th e conclusio n o f th e Inquiry .

Communicatio n

Measure s wer e implemente d t o ensur e tha t th e conduc t o f th e Inquir y wa s a s transparen t a s possibl e fo r al l interes t group s an d th e genera l public . Th e followin g step s wer e taken :

Notice s wer e publishe d i n selecte d dail y an d nationa l newspaper s — th e Timnciai Review, Vie Australia)!, The Age an d th e Sydney Morning Herald o n 2 Decembe r 200 5 an d th e Courier Mail an d th e West Australian o n 6 Decembe r 2005 — advisin g o f th e establishmen t o f th e Inquiry , callin g fo r notic e fro m person s seekin g leav e t o appear , an d invitin g submission s fro m anyon e wit h informatio n relevan t t o th e Inquiry . A tentativ e dat e o f 1 7 Januar y 200 6 wa s se t fo r th e commencemen t o f hearings .

A website , www.oiIforfoodinquiry.gov.au , wa s operationa l b y th e en d o f Novembe r 200 5 an d coul d b e accesse d directl y throug h th e UR L o r vi a th e websit e o f th e Attorney-General' s Department , www.ag.gov.au . Th e websit e i s t o b e maintaine d b y th e departmen t a t th e conclusio n o f th e Inquiry . Materia l poste d t o th e websit e included :

- th e term s o f referenc e an d Letter s Paten t

- notic e o f hearin g date s

- th e transcrip t o f hearing s — twic e dail y

- exhibit s

- al l statements , directions , reason s an d practic e note s issue d b y th e

Commissione r

- link s t o relevan t Federa l Cour t judgment s

Report of the Oil- for- Foot i I n quiry 1 3 3

- a lin k t o th e repor t o f th e Independen t Inquir y Committe e vi a th e Unite d Nation s websit e

- profile s o f th e Commissione r an d Counse l Assistin g

contac t details , includin g th e stree t an d posta l addresse s an d switc h an d 180 0 telephon e numbers .

 Fro m 1 6 Januar y 200 6 al l hearing s wer e conducte d i n ope n sessio n an d provisio n wa s mad e t o sea t member s o f th e publi c an d th e media .

 Th e transcrip t o f fiv e day s o f confidentia l hearing s i n Decembe r 200 5 an d Januar\ ' 200 6 wa s mad e publi c befor e th e conclusio n o f th e Inquiry .

 A genera l emai l address , oilforfoodinquiry@ag.gov.au , wa s publishe d an d use d extensivel y b y member s o f th e public , bot h i n Australi a an d overseas , t o communicat e wit h th e Inquiry . A lis t o f thos e wh o wrot e t o th e Inquir y i s a t Tabl e 10.2 .

M r Ric k Willi s o f Hinto n & Associate s (Aust ) Pt y Lt d wa s appointe d medi a liaiso n office r i n earl y Decembe r 2005 . Hi s functio n wa s t o ac t a s a poin t o f contac t fo r representative s o f th e prin t an d electroni c medi a o n matter s relatin g t o th e Inquir y an d t o dea l wit h an y question s o n genera l matters . H e attende d th e Inquir y o n hearin g day s an d wa s availabl e t o th e medi a vi a telephon e an d emai l a t othe r times .

M r Willis ' contrac t wa s terminate d shortl y afte r hearing s concluded .

Ther e wer e n o regula r o r specia l medi a briefing s arranged , an d neithe r th e Commissione r no r othe r officer s o f th e Inquir y gav e interview s t o th e medi a Journalist s presen t i n th e hearin g roo m wer e usuall y provide d wit h copie s o f witnes s statement s an d som e exhibit s o f interest , bu t onl y afte r thos e material s ha d bee n

tendered . O n a fe w occasion s Senio r Counse l Assistin g spok e briefl y a t th e clos e o f a day' s proceeding s t o a rando m grou p o f journalist s i n orde r t o provid e clarificatio n o i i certai n issue s tha t ha d arisen . Thi s wa s don e i n th e interest s o f bette r understandin g an d accurat e reporting . N o medi a release s wer e issue d b y th e Inquiry .

I n general , ther e wa s n o filmin g o r televisin g o f Inquir y proceedings . Camera s wer e allowe d int o th e hearin g roo m onl y b y arrangement . Thi s occurre d o n 1 6 Januar x 2006 , th e firs t da y o f publi c hearings , whe n th e Commissioner' s openin g remark s an d th e openin g addres s o f Senio r Counse l Assistin g wer e recorded . O n a fe w othe i occasion s camera s wer e allowe d i n durin g th e readin g o f a statemen t b y th L Commissioner . A t n o stag e wa s an y witnes s filme d o r recorde d givin g evidenc e o enterin g o r leavin g th e hearin g room .

1 3 4 Rqnjrt of the Oil-for-Food luquir;

Table 10.2 People who wrote to the Inquiry

Bain, John Fozzard, Robert Moodie, Rob

Bannon, Ron Gaekwad, Dr U Mullard, Philip

Barnett MLA, Colin Gaisford, Alastair Newman, Juiie

Barton, Jolin Goater, Terry Newnham, Ailan R

Barlos, Prof. Stephen Grieve, Ian Polya, Dr Gideon

Belmonte, Jon Griggs, Tony Price, Ronald

Benjamin, P Gurciullo, Dr Sebastian Prowse, Trevor

Bennett, Frank Harris, Mr Rigg, Tony

Bennett, PP Hauptmann, Ally Robinson MP, Tony

Bradley, Leon Hawkins, David Rudd MP, Kevin

Brown, Ken Howard, Peter Seymour, Michael

Burton, Tony Janevich, Jordan Siewert, Senator Rachel

Cartnody, RJ Johnston, Felicity Skyring, Alan

Clausen, Derek Juli MP, The Hon. David Thomson MP, Kelvin

Coogan, K Kevin, Tony Tremain, Robert

Easterbrook, Sandy Laurie, John Unger, Paul

Elliston, Robert Lipsett, John Versteegen, Joseph

Emerson MP, Dr Craig Ludwig, Senator Joe Whitton, Evan

Eyres, Tony MacMillan, W Wilson, James

Fishpool, Terry Mason, Malcolm E Wright, Richard

Fitzgibbon MP, Joel McCredie, James D Winston, Chris

Forsyth, Dawn McGregor, John

Fox, JL McGuirk, Michael

The Inquiry was aware that photographers and camera crews representing various media organisations were stationed in the street outside the Inquiry's premises, and witnesses and their legal representatives were frequently photographed or filmed on their way to and from hearings. That material was widely published in the national media. This was beyond the control of the Inquiry.

Budget

Initially the Inquiry was allocated a budget of $5,564,916 for the financial year ZOOS- OS; this amount was based on a reporting date of 31 March 2006. When the term of the Inquiry was extended to 30 June 2006 the budget allocation was increased to $8,170,167 for the financial year. This amount was not fully expended since a further extension meant that some costs that would normally arise at the closing stages were not incurred. To 30 June 2006 expenditure totalled $6,450,078. In 2006-07 the

135 Report of the Oil-for-Food Inqtiir} /

Attorney-General' s Department , i n consultatio n wit h th e Executiv e Officer , propose d a furthe r allocatio n o f $5,758,71 4 t o cove r Inquir y operation s t o it s fina l reportin g dat e o f 2 4 Novembe r 200 6 an d th e wind-u p phase . Th e Inquir y mad e n o request s fo r increase s t o it s budge t allocatio n beyon d consideratio n o f th e fund s require d t o cove r it s extende d reportin g dates .

A t th e en d o f Octobe r 200 6 expenditur e wa s $9,124,361.0 0

1 3 6 Report of the Oil-for-Food I n q t i i r } /

Appendix 11 AWB Limited and AWB

(International) Limited: structure

Table 11.1 The Board of Directors of AWB Limited, November 2006

Name Details of directorship

Mr Brendan Stewart^ Chairman (AWB) (also AWBI)

Mr Robert Barry^ (AWB)

Director of AWB: current at 6 November 2006

Elected on 3 February 2000 and re-elected on 13 March 2003

Elected by the directors as Chairman on 14 March 2002 and re-elected Chairman on 13 March 2003

Assumed position of Executive Chairman of AWB on 9 February 2006

AWB Committees: Nomination (Chair), Remuneration (Chair), Investment (Chair), Group Corporate Risl< (ex-officio member) Audit (ex-officio member) and Customers & Stal

Non-executive director of AWBI: current as at 29 May 2006

Elected by the directors as Chairman of AWBI on 14 March 2002 and re-elected Chairman on 13 March 2003

Resigned as Chairman of AWBI on 9 February 2006^

AWBI Committees: Single Desk

Deputy Chairman; non-executive director of AWB: current as at 6 November 2006

Appointed on 12 January 1999 as an Additional Director; elected on 15 March 2001 and re-elected on 11 March 2004 as a B-Class Director

Committees: current Chairman of the Board Audit Committee

Mr Stephen Chamarette" (AWB) Non-executive director of AWB: current as at 6 November 2006 Elected as non-executive director on 11 March 2004

Committees: Group Corporate Risk, Nomination, Services Agreement and Customers & Stakeholders

Mr Anthony Howarth (AWB)

Non-executive director of AWB: current as at 6 November 2006

Appointed as non-executive director on 10 March 2005

Mr Xavier Martin (AWB)

Non-executive director of AWB: current as at 6 November 2006

Elected on 13 March 2003 and re-elected on 23 February 2006

Committees: Audit

137 Report of the Oil-for-Food Inqtiir} /

Name Details of directorship

IVlr John Ferguson Simpson (AWB) Non-executive director of AWB: current as at 6 November 2006 From November 1998 to present

Committees: Services Agreement (Chair), Nomination, Remuneration and Customers & Stakeholders

Non-executive director of AWBI; previous

From November 1998 to March 2000 (approx)

Mr Warrick McClelland^ (AWB) Non-executive director of AWB: current as at 6 November 2006 Elected as a non-executive director on 4 November 1998 and re-elected

on 14 March 2002 and 10 March 2005

Committees: Audit and Services Agreement

Mr Christopher MoffetÆ (AWB and AWBI) Non-executive director of AWB: current as at 6 November 2006 'A class' director of AWB since election on 4 November 1998; re-elected

on 14 March 2002, re-elected again on 10 March 2005

Member of the Corporate Risk Committee since 1998

Former member of the Investment Committee

Member of the Board Audit Committee from 1999 to 2001

Non-executive director of AWBI: current as at 6 November 2006

'A class' director since January 1999

Mr John SchmolP (AWB)

Non-executive director of AWB: current as at 6 November 2006

Appointed on 10 March 2005

Committees: Audit, Investment, Services Agreement and Governance

Mr Brendan FitzgeraldÆ (AWB) Non-executive director of AWB: current as at 6 November 2006 Elected as non-executive director on 13 March 2003

Committees: Audit, Services Agreement and Customers & Stakeholders

Mr Peter Poison^ (AWB and AWBI)

Non-executive director of AWB: current as at 6 November 2006

Appointed on 31 March 2003 as an Additional Director of AWB and elected on 10 March 2005 as a B Class Director

Committees: Group Corporate Risk (Chair), Remuneration, Investment and Governance (Chair)

Non-executive director of AWBI: current as at 6 November 2006

Appointed on 31 March 2003

Sources: 1. Ex 1252,WST.0020.0141. 2. Ex 497, WST.0019.0046_R, para. 1. According to AWB's w/ebsite, however, Mr Stewart resigned as Chairman of AWBI on 23 February 2006: http://www.awb.com.aij/aboutawb/corporate/boardprofiles/#bstewart . 3. Ex778,AWB.0415.0002_R. 4. Ex780, AWB.0415.0006_R. 5. Ex779,AWB.0415.0004_R, 6. Ex 519, WST.0020.0002^R. 7. Ex783, AWB.0415.0012_R. 8. Ex781,AWB.0415.0008.

Ex 782,AWB.0415.0010^R. 9.

138 Report of the Oil-for-Food Inqtiir} /

Table 11.2 Board of Directors of AWB Limited, 1 July 1999

Position Name

Chairman

Deputy Chairman

Non-executive Director

Mr Trevor Fl¸gge

Mr Robert Barry

Mr Andrew Inglis

(The late) Mr Geoff Johnson

Mr Warrick McClelland

Mr Laurie Marshall

Mr Chris Moffet

Mrs Kerry Sanderson

Mrs Brenda Shanahan

Mr John Simpson

Mr John Thame

Source: Ex 8, WST.0001.0252_R at 0260_R-0261_R, para. 19.

139 Report of the Oil-for-Food Inqtiir} /

O

Table 11.3 Board of Directors of AWB Limited, 1999 to 2006

Position 1999 2000 2001 2002 2003 2004 2005 2006

Chaimian / Trevor Fl¸gge Trevor Fl¸gge AO Trevor Fl¸gge Brendan Stewart Brendan Stewart Brendan Brendan Brendan Stewart

Non-executive AO AO (appointed Stewart Stewart (appointed

Director 14.03.02) Executive

Chairman on 09.0Z06)^

Chief Executive Murray Rogers Murray Rogers Andrew Lindberg Andrew Lindberg Andrew Lindberg Andrew Andrew Andrew Lindberg

Officer/ AM AM (until Lindberg Lindberg (resigned

Managing 02.02,00) 09.02.06, effective

Director 1 Andrevi/ Lindberg 30.04.06)'

Executive {appointed Peter Poison

Director 03,04,00) (acting CEO from

09.02.06-21.04.06)'

Deputy Chairman Robert Barry Robert Barry Robert Barry Robert Barry Robert Barry Robert Barry Robert Barry Robert Barry

Non-executive Director Non-executive Andrew Inglis Andrew Inglis Brenda Brenda Brendan Fitzgerald Brendan Brendan Brendan

Directors Geoff Johnson (until 03.02.00) Shanahan Shanahan (from 13,03,03) Fitzgerald Fitzgerald Fitzgerald

Laurie Marshall Geoff Johnson Warrick Warrick Brenda Shanahan Steve Steve Steve Chamarette

Warrick (until 03.02.00) McClelland McClelland (until end Mar 03) Chamarette Chamarette Tony Howarth

McClelland John Thame John Thame John Thame Laurie Marshall (from 11.03,04) Xavier Martin Warrick

Christopher Brenda Shanahan Kerry Sanderson Kerry Sanderson Xavier Martin Xavier Martin Warrick McClelland

Moffet Warrick Michael Michael (from 13.03.03) Warrick McClelland Christopher Moffet

Kerry Sanderson McClelland Shanahan Shanahan Warrick McClelland Christopher Peter Poison

Brenda Michael Brendan Stewart John Simpson McClelland Christopher Moffet John Schmoll

Shanahan Shanahan John Simpson Christopher Christopher Moffet Moffet Peter Poison John Simpson

John Simpson (elected 03.02.00) Christopher Moffet Kerry Sanderson Peter Poison John Schmoll Xavier Martin

John Thame Kerry Sanderson Moffet Lauhe Marshall John Simpson Kerry (from 10.03.05)

Brendan Stewart Laurie Marshall Ian Gush John Thame Sanderson John Simpson

(elected 03.02.00) Ian Gush Peter Poison John Simpson Tony Howarth

John Simpson (appointed John Thame (from 10.03.05)

Christopher 31.03.03) Laurie Marshall John Thame

Moffet Michael Shanahan (until 11.03.04) (until 14.03.05)

Laurie Marshall (until 13.03,03) Kerry

Ian Custi Ian Cush Sanderson (until

(elected 03.02.00) (until 13.03.03) 10.03.05)

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1, Statement from the Board of AWB Limited, 9 February 2006: http://www.awb.com.au .

Sources: AWB Annual Reports 1999-2005; Ex 1204, EXH,0002.0002; Ex 1205, EXH.0002,0035; Ex 1206, EXH,0002,0397; Ex 1210, EXH.0002,0511, See also . EXH.0002,0133; Ex 1207, EXH.0002.0216; Ex 1208, EXH,0002.0298: Ex 1209,

Table 11.4 Board of Directors of AWB (International) Limited, November 2006

Name Details of directorship

Mr Ian Dˆnges (Chairman AWBI)

Non-executive director of AWBI: current as at 6 November 2006

Elected as a non-executive director of AWBI on 15 March 2001 and re-elected on 11 March 2004

Chairman of AWBI: current as at 6 November 2006

Elected as Chairman of AWBI on 23 February 2006

Committees: Compliance and AWB Limited Board Customers and Stakeholders

Mr Peter Poison^ (AWB and AWBI)

Non-executive director of AWB: current as at 6 November 2006

Appointed on 31 March 2003 as an Additional Director of AWB and elected on 10 March 2005 as a B Class Director

Committees: Group Corporate Risk (Chair), Remuneration, Investment and Governance (Chair)

Non-executive director of AWBI: current as at 6 November 2006

Appointed on 31 March 2003

Mr Christopher Moffet^ (AWB and AWBI) Non-executive director of AWB: current as at 6 November 2006 'A class' director of AWB since election on 4 November 1998; re-elected

on 14 March 2002, re-elected again on 10 March 2005

Member of the Corporate Risk Committee since 1998

Former member of the Investment Committee

Member of the Board Audit Comnnittee from 1999 to 2001

Non-executive director of AWBI: current as at 6 November 2006

'A class' director since January 1999

Mr Wayne Gibson (AWBI)

Non-executive director of AWBI: current as at 6 November 2006

Elected as non-executive director on 3 February 2000, re-eiected on 13 March 2003 and 23 February 2006

Mr Brendan Stewart (AWB and AWBI)

Mr Clinton Starr (AWBI)

Non-executive director of AWBI: current as at 6 November 2006

Resigned as Chairman of AWBI on 23 February 2006^

Committee: Single Desk

Non-executive director of AWBI: current as at 6 November 2006

Elected on 4 November 1998 and re-elected on 14 March 2002 and 10 March 2005

Committees: Compliance (Chair), Single Desk (Chair) and AWB Limited Customers and Stakeholders

Sources:

1. Ex782, AWB.0415.0010_R.

2. Ex519,WST.0020.0002_R. 3. See AWB Board profiles, , 6 November 2006.

Report of the Oil- for- Footi Inquiry 141

M

Table 11.5 Board of Directors of AWB (International) Limited, 1999 to 2006

Position 1999 2000 2001 2002 2003 2004 2005 2006

Chairman I Non-executive Director

Trevor Fl¸gge AO

Trevor Fl¸gge AO

Trevor Fl¸gge AO

Brendan Stewart (appointed 14.03.02)

Brendan Stev^rart Brendan Stevi/art Brendan Stevi/art Brendan Stewart (until 23.02.06)

Ian Dˆnges (appointed 23.02.06)

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Executive Director

Non-executive Directors

Murray Rogers AM

Murray Rogers AM (until

02.02.00)

Andrew Lindberg (appointed 03.04.00)

Andrew Lindberg Andrew Lindberg Andrew Lindberg Andrew Lindberg Andrew Lindberg

Geoff Johnson

Christopher Moffet

Brenda Shanahan

John Simpson

Clinton Starr

Geoff Johnson (until 03.02.00)

Wayne Gibson (appointed 2000)

Clinton Starr (appointed Oct 2000)

Christopher Moffet

Brenda Shanahan

John Simpson (until approx. Mar 2000)

Ian Dˆnges (appointed Mar 01)

Wayne Gibson

Clinton Starr

Christopher Moffet

Brenda Shanahan

lan Dˆnges

Wayne Gibson

Clinton Starr

Christopher Moffet

Brenda Shanahan

Brenda Shanahan (until end Mar 03)

Christopher Moffet

Peter Poison (from 31.03.03)

lan Dˆnges

Wayne Gibson

Clinton Starr

Clinton Starr

Christopher Moffet

Peter Poison

lan Dˆnges

Wayne Gibson

Clinton Starr

Christopher Moffet

Peter Poison

lan Dˆnges

Wayne Gibson

Andrew Lindberg (resigned 09.02.06)^

Christopher Moffet

Peter Poison

Wayne Gibson

Clinton Starr

Brendan Stewart (from 23.02.06)

1. Statement from the Board of AWB Limited, 9 February 2006; http://vww.awb.com.au .

Sources: AWB Annual Reports 1999-2005; Ex 1204, EXH.0002,0002; Ex 1205, EXH.0002.0035; Ex 1206, EXH.0002,0397; Ex 1210, EXH.0002.0511. See also . EXH.0002.0133; Ex 1207, EXH.0002.0216; Ex 1208, EXH.0002.0298; Ex 1209,

Figure 11.1 AWB Limited's management structure, July 1999

a i g i i i N i i 'W

W S T . 0 0 0 1 . 0 3 35

Annexure WMR-6

AWB Limited's Management Structure

A WB Ltd

B o a rd

CE 0

Manager Global Sales and Marketing [Niget Officer)

International Manager {Ted Laskie)

Japan Middle East/

Africa (Mark Emons)

Europe South

EasI Asia

Cairo Manager [Dominic Hagan)

Source: Ex 8, WST.0001.0335.

Report of the Oil- for- Footi Inquiry

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Treasury - G. Morriss Trade Finance - T. Aucher Risk MHnagcmcnt- S. Owen Commercial Managers -

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Inform. SystemsyE-Commerce -K. McCartney (Q.M.) Supply Chain Management - I.CfT>sbie(G.M.)ª Process Re-engineering - T. Russell Business Services - M. Robinson

Profit Centres Seed3-P.WUsoD(G.M.) Agrlfood- B. CoUins (GJ´I.) Chartering - M. Watson Financial Services & Product Development

-G.Drew(aj^) Mergers &. Acquisitions - I.Woolfe Research & Development

- T. Kent

Trading - J.Robeils)((O.M.Aust) International Sales - M. Emons #(G.M.)

Maritet Analysis " - C. Jeffery QA & Hygiene *

- G. McMullen Global Markets Devel." - P.England Grower Services

- L.WUson#(G.M.)

Pricing - S. Scales

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-G.Drew(G.M.) Meigcn & Acquisitions - I. Woolfe Reseaich & Development

- T.Kent

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- L. Wilson (GJvt.)

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limited AWBI

Trevor Fiijgge Trevor Fl¸gge Chair Chair

CUefExccuave Andrew Lindberg (Murray Rogers 10 2.4.00)

OiiefhfomiiitlonOfflccr Jin Gillingham From Ocl 00

ChJiterioe GM Peter Jones

IVidcr- Pool Mchael Raftopoulos from Jan 2001

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ChiReriae Ofliccr Mart< Rowland Aug 98-Feb 01 Snf Ocean Fralghl Trader Mar 01

Charte dog Opendonc Oflkcr Peter Wall

GGMltedlne Oct 00-PeterGeaty from Oct Ot ind chaitering, global trading & rtsk management

GMNatloii´IPoolAWB(D Sarah Scales Apr 01 Peter Geary: GM Export Pools Oct SS-Sept 00

GGMSalei 10.01-iz.02

Tim Goodacre GM Mat Acq's 10.98-9.99 GM Trading (intl nnaiket'g)10.99^.01

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Appendix 13 Inland transportation fees

Table 13.1 Inland transportation fees paid by AWB Limited/AWB Pool in respect of Oil-for-Food Programme contracts, July 1999 to March 2003

Date of

AWB Contract

United Nations Approval Name of

Inland Transportation fee payable Total Inland

Transportation fees^

Phase contract No. No.^ Purchaser (pmt}= paid<

1999

Phase VI 14.07.99 A4653 600078* IGB US$12.00 US$3,148,542,66

Phase VI 14.07.99 A4654 600079* IGB US$12.00 US$3,143,272,97

Phase VI 14.07.99 A4655 600080* IGB US$12.00 US$2,483,532,82

(Phase IV) 14.10.99 A4821 49885 IGB ni|6 US$315,000.00'

(Phase V) 24.12.98 A4334 50226ª IGB nil´ US$250,541.76"'

Phase VI 14.10.99 A4822 600744* IGB US$12.00" US$2,657,922,65

Phase VI 02.12.99 A4908 600400 and

600401

Commodity Specialists Co. US$12.00 US$1,119,864,00

Phase VI 14.12.99 A4906 600020 Savas Grain US$12.00 US$1,208,890,56

(Phase V) 14.12.99 A4907 50173´ Saves Grain nil'3 US$246,084.00

2000

Phase VII 20.01.00 A4970 700034* IGB US$15.00 US$4,722,570.00

Phase VII 20.01.00 A4971 700033* IGB US$15.00 US$4,718,653,95

Phase VII 20.01.00 A4972 700032* IGB US$15.00 US$4,513,269.60

Phase VII 04.02.00 A4993 700143 Savas Grain US$15.00 US$2,340,308,70

Phase VII 05.03.00 A0062 700483 Savas Grain US$15.00 US$763,350,00

Phase VII 06.04.00 A0101 700498 Commodity

Specialists Co. US$15.00''' US$1,445,750,00

Phase VIII 16.07.00 A0265 800030* IGB US$14.00 US$2,940,000.00

Phase VIII 16.07.00 A0266 800032* IGB US$14.00 US$5,730,827.90

Phase VIII 16.07.00 A0267 800031* IGB US$14.00 US$5,895,000,00

Phase VIII 02.11.00 A0430 800667* IGB

(US$ equiv.) DM101.46 (US$44.50) DM31,596,567,05

(US$13,858,143,44)15

2001

Phase IX 02.02.01 A0552 900011' IGB

(US$ equiv.)

DIV196.45

(US$45.80)

DM40,183,552,00 and ¨4,931,089.82

(US$23,661,542,03)´

Phase IX 02.02.01 A0553 900012* IGB

(US$ equiv.)

DM96.88

(US$46.00)

DM36,436,408,79 and ¨6,495,340.93

(US$23,332,942.79)1'

Phase X 13.06.01 A0784 1000002* IGB

(US$ equiv.) Eur 55,17 (US$46.70) ¨28,714,871.11

(US$24,306,407,12)18

157 Report of the Oil-for-Food Inqtiir} /

Phase

Date of contract

AWB Contract No.

United Nations Approval No.i

Name of

Purchaser

Inland Transportation fee payable (pmt)i

Total Inland Transportation fees' paid^

Phase X 13.06.01 A07B5 1000117' 1GB

(US$equiv.) Eur 55,40 (US$46,90) ¨29,010,790,04

(US$24,559,676.04)19

Phase XI 20.12.01 A1111 1100014* 1GB

(US$ equiv.) Eur 55,17 (US$48,77) ¨29,444,567,08

(US$24,924,076.18)2''

Phase XI 20.12.01 A1112 1100013* tGB

(US$ equiv.) Eur 55,40 (US$48.97) ¨28,238,139,53

(US$23,905,573.00)21

2002

Phase XII 23.06.02 A1441 1200083* IGB

(US$ equiv.) Eur 48,53 (US$47.75) ¨18,229,441.09

(US$17,936,447.81)22

Phase XII 11,12,02 A1670 1201376 IGB

(US$ equiv.) Eur51,33 (US$51.15) n/a

Phase XIII 11,12,02 A1680 1300016* IGB

(US$ equiv.) Eur 51,33 (US$51.15) nla^'

Total paid US$224,128,189.98Æ

Notes 1. An asterisk {*} against the contract signifies a contract that was listed as against AWB Limited in the °IC's final report: Independent Inquiry Committee into the United Nations Oil-for-Food Programme, Manipulation of the Oil-for-Food Programme by ihe Iraqi Regime. (Paul A Voicker, Chairman), United Nations, New York, 27 October 2005 (Ex 13, UNO.0005.0001). 2. This includes the 10% after-sales-service fee from the time that additional fee was also imposed. In relation to contracts

A1441 (Ex 542, DFT.0006,0013), A1670 (Ex 1223, AWB.0060.0343_R) and A1680 (Ex 1224, AWB.0021.0021_R), the amount in the column represents the inland transportation fee (including the 10% after-sales-service fee) that was agreed between AWB Limited and the IGB at the time the contract was concluded. The price payable by the IGB under each of these three contracts, including the amount of any inland transportation fee payable, whether such a fee was payable in respect of all or any of the shipments or remaining shipments under the contract and whether any 10% after-sales-service fee was payable, were renegotiated following the commencement of hostilities in Marcti 2003 (see Chapter 25). This table does not include details of the renegotiated prices for those contracts.

3. Ex 950, INQ.0017.0062 (Summary of Inland Transportation Fees Paid as per Ferrier Hodgson Spreadsheets). 4. This includes the 10% after-sales-service fee from the time it was first imposed. 5. This sale was treated as a sale under phase IV of the Oil-for-Food Programme; as such no inland transportation fees were payable in respect of wheat shipped under this contract. 6. As a sale under phase IV of the Oil-for-Food Programme, no inland transportation fees were payable in respect of wheat

shipped under this contract. 7. Although no inland transportation fees were payable in respect of wheat shipped under ttiis contract, AWB Limited in fact paid inland transportation fees of US$12 pmt in respect of the one shipment made under this contract on the Pretty Lady (which also carried a shipment under contract A4334, Ex 1450, AWB,0039.0020_R). See Ex 1450, AWB.0045.0013_R (US Dollar

Payment Request), by which $565,541,76 was paid in respect of contracts A4821 (Ex 1450, AWB.0058.0143_R) and A4334 (Ex 1450, AWB.0039.0020_R); for the tonnage shipped per contract see Ex 1450, AWB.0045.0028_R (invoice under contract A4821) and Ex 1450, AWB.0045.0026_R (invoice under contract A4334); see also Ex 950, INQ.0017.0062. 8. This was an earlier contract under phase V of the Oil-for-Food Programme. 9. As a phase V contract, no inland transportation fee was payable in respect of wheat shipped under this contract. 10. Although no inland transportation fees were payable in respect of wheat shipped under this contract, AWB Limited in fact paid inland transportation fees of USS12 pmt in respect of the final shipment made under this contract, a shipment on the Pretty Lady (which also carried a shipment under contract A4821). See Ex 1450, AWB,0045.0013_R (US Dollar Payment Request), by which $565,541.76 was paid in respect of contracts A4821 (Ex 1450, AWB.0058.0143_R) andA4334 (Ex 1450, AWB.0039.0020^R); for the tonnage shipped per contract, see Ex 1450, AWB.0045.0028_R (invoice under contract A4821) and Ex 1450, AWB.0045.0026_R (invoice under contract A4334); see also Ex 950, INQ.0017.0062. 11. In respect of one shipment under this contract, a fee of US$15 pmt was in fact paid by AWB Limited. 12. This is the balance of an earlier phase V contract.

158 Report of the Oil-for-Food Iiiqiiiiy

13. Although no inland transportation fee was payable in respect of wheat shipped under this contract (because it was a phase V contract), AWB Limited in fact paid inland transportation fees of US$12 pmt in respect of the shipment made under this contract (that wheat having been shipped together with wheat shipped under contract A4822 (Ex 1451, AWB.0058.0068_R), in respect of which Inland transportation fees were payable).

14. In respect of one shipment under this contract, a fee of US$14 pmt was in fact paid by AWB Limited. 15. Applying the exchange rate that was used to convert the agreed price of the wheal from US$ to DM. 16. Part of the inland transportation fees payable in respect of shipments made under this contract was paid in euros as well as Deutschmark. The total amount paid by AWB Limited in these two currencies was equivalent to US$23,661,542.03. 17. Part of the inland transportation fees payable in respect of shipments made under this contract was paid in euros as well as

Deutschmarl(. The total amount paid by AWB Limited in these two currencies was equivalent to US$23,332,942.79.

18. Applying the exchange rate that was used to convert the agreed price of the wheat from US$ to euros. 19. Applying the exchange rate that was used to convert the agreed price of the wheat from US$ to euros. 20. Applying the exchange rate that was used to convert the agreed price of the wheat from US$ to euros. 21. Applying the exchange rate that was used to convert the agreed price of the wheat from US$ to euros. 22. This represents the total amount of the inland transportation fees paid by AWB Limited in respect of shipments under this

contract A1441 (Ex 542, DFT.0006.0013) before the commencement of hostilities in March 2003. AWB Limited did not pay any inland transportation fees in respect of those shipments under this contract that were completed after March 2003. 23. All shipments under this contract Al 670 (Ex 1223, AWB.0060,0343_R) were completed after the original price had been renegotiated and in circumstances where AWBL entered into a written contract with Alia for Transportation and General Trade

Co. for the carriage of wheat within Iraq in October 2003 (see Ex 954, INQ.0017.0015_R at AWB.0211.0001_R-0013_R, p. 70). Payments of inland transportation fees to Alia made in respect of these shipments under this contract were genuine payments of the cost of the carriage of the wheat (the responsibility of which had been assumed by AWBL) and were not paid as 'kickbacl

renegotiated and in circumstances where AWB Limited entered into a written contract with Alia for Transportation and General Trade Co. for the carriage of wheat within Iraq in October 2003 (see Ex 954, INQ.Q017.0015_R at AWB.0211.0001 _R-0013_R, p. 70). Payments of inland transportation fees to Alia made in respect of these shipments under this contract were genuine payments of the cost of the carriage of the wheat (the responsibility of which had been assumed by AWBL) and were

not paid as 'kickbacks' to Iraq. 25. Paid in US dollars or the US dollar equivalent of other currencies.

159 Report of the Oil-for-Food Inqtiir} /

Appendix 14 AWB Limited: contracts,

July 1999 to December

2002

Table 14.1 AWB Limited contracts, July 1999 to December 2002

Contract number

JN

approval number Date of contract

Short form contract Signed by

Export sales note (document and exhibit number) Contracl

booked by

Contract authorised by

A4653 600078 14.07.99 AWB.0058.0414 R

{Ex 1447)

Mr Emons AWB,0058,0456_R (Ex 1447) Mr Emons Mr Borlase

A4654 600079 14.07.99 AWB.0058.0415 R

(Ex 1448)

Mr Emons AWB,0058,0457_R (Ex 1448) Mr Emons Mr Borlase

A46S5 600080 14.07.99 AWB.0058.0416_R

(Ex 1449)

Mr Emons AWB.0058,0458_R (Ex 1448) Mr Emons Mr Borlase

A4821 4988 14.10.99 AWB.0058,0128_R

(Ex 1450)

Mr Emons AWB.0058,0156 R

(Ex 1450)

Mr Emons Mr Borlase

m il 600744 14.10,99 AWB.0058,0056_R

(Ex 1451)

Mr Hunter AWB.0058.0076 R {Ex 1451) Mr Emons Mr Borlase

A4908 600400

600401

02.12.99 AWB.0056.0243 R (Ex 1446) Mr Emons AWB,0056.0242 R

(Ex 1446)

Mr Borlase Mr Borlase

A4906 600020 14,12,99 AWB.0057,0209 R

(Ex 1445)

Mr Emons AWB.0057.0208 R

{Ex 1445)

Mr Borlase Mr Borlase

A4907 50173 14.12.99 AWB,0057.0168_R

(Ex 1445)

Mr Emons AWB.0057.0203_,R (Ex 1452) Mr Borlase Mr Borlase

A4970 700034 20.01.00 AWB.0110.0256_R

(Ex 1453)

Mr Emons AWB.0059.0533_R (Ex 1453) Mr Emons Mr Borlase

A4971 700033 20.01,00 AWB.0110.0255_R

(Ex 1453)

Mr Emons AWB.0059,0535 R

(Ex 1453)

Mr Emons Mr Borlase

A4972 700032 20.01.00 AWB.0110.0257 R

(Ex 1453)

Mr Emons AWB.0059.0534 R

(Ex 1455)

Mr Emons Mr Borlase

A4993 700143 04.02.00 AWB.0059.0542 R

(Ex 1455)

Mr Emons AWB.0059.0265 R

(Ex 1456)

Mr Emons Mr Hogan

A0062 700483 05.03.00 AWB.0053.0080 R

(Ex 1376)

Mr Emons AWB.0059.0253 R

(Ex 1457)

Mr Emons Mr Hughes

A0101 700498 06.04.00 AWB.0059.0123 R

(Ex 360)

Mr Emons AWB.0059.0122 R

(Ex 1456)

Mr Emons Mr Hughes

A0265 800030 16.07.00

07.08.00 AWB.0061.0506_R (Ex 1459) Mr Stott AWB.0061.0554_R

(Ex 1459)

Mr Hogan Mr Borlase

A0266 800032 16.07.00

07.08.00 AWB.0061.0555 R (Ex 1460) Mr Stott AWB.0061.0553 R

(Ex 1460)

Mr Hogan Mr Borlase

A0267 800031 16.07.00

07.08.00 AWB,0061,0520 R (Ex 1461) Mr Stott AWB.0061.0552_R

(Ex 1461)

Mr Hogan Mr Borlase

A0430 800667 02.11.00 AWB.0137.0376 R

(Ex 1376)

Mr Hogan AWB.0061.0260_R (Ex 1462) Mr Hogan Mr Borlase

A0552 900011 02.01.01 AWB.0111,0077 R

(Ex 171)

Mr Hogan AWB.0061.0197 R

(Ex 1463)

MrHogan Mr Gibbcns

A0553 900012 02.01.01 AWB.0111,0085^R

(Ex 171)

Mr Hogan AWB.0061.0106_R (Ex 1464) Mr Hogan MrGibbons

165 Report of the Oil-for-Food Inqtiir} /

Contract number

UN

approval number Date of contract

Short form contract Signed by

Export sales note (document and exhibit number) Contract

booked by

Contract authorised by

A0784 1000002

(901228) 13,06.01 UNO.1214.0142 (Ex 1211) Mr Hogan AWB.0062.0663 R

(Ex 1465)

Mr Hogan Mr T Lees

A0785 901229

(late: became 100007)

13.06.01 AWB.0062.0397_R {Ex 1466) Mr Hogan AWB,0062,0411 R

(Ex 1466)

Mr Hogan Mr T Lees

A im 1100014 20,12.01 UNO.1214.0285

(Ex 1211)

Mr Hogan AWB.0062.0254_R (Ex 1467) Mr Hogan Mr Edmonds-

Wilson

A1112 1100013 20.12.01 UNO.0003.0944 R

(Ex 1217)

Mr Hogan AWB,0062.0112 R

(Ex 1468)

Mr Hogan Mr Edmonds-

Wilson

A1441 1200083 23.06.02 AWB.0018-0028_R

(Ex 1444)

Mr Hogan N/A

A1670 1201376 11.12.02 AWB,D050,0343 R

(Ex 1223)

Mr Hogan N/A

A1680 1300016 11.12.02 AWB.0021,0021 R

(Ex 1224)

Mr Hogan N/A

166 Report of tlie OU-for-FooJ Inqniry

Appendix 15 Contracts submitted to

DFAT and permissions to

export

Table 15.1 AWB contracts submitted to DFAT for United Nations approval

Contract Date Document ID From To

A4653 (Ex 1447, AWB,0058.0414_R) 27.07.1999 Ex 1447, AWB.0058.0425_R Darryl Borlase Gai Brodtman

A4654 (Ex 1448,AWB.0058.0415_R) 27.07.1999 Ex 1447, AWB.0058.0425^R Darryl Borlase Gal Brodtman

A4655 (Ex 1449,AWB.0058.0416_R) 29.07.1999 Ex 1449,AWB.0058.0419_R Darryl Borlase Gai Brodtman

A4821 (Ex 1450,AWB.0058.0128_R) 20.10.1999 Ex 542, DFT.0002.0054 Darryl Borlase Gai Brodtman

A4822 (Ex1451,AWB.0058.0056_R) 29.10.1999 Ex1451,AWB,0106.0069_R Darryl Borlase Deb Watson

A49081 (Ex 1446, AWB.0056.0243_R) 21.12.1999 Ex 729, AWB,0106,00712

A49061 (Ex 1445,AWB.0057.0209_R) 21.12.1999 Ex 729, AWB.0106.00712

A49071 {Ex 1445,AWB,0057,0168_R) 21.12,1999 Ex 729, AWB,0106.00712

A4970 (Ex 1453, AWB.0110.0256_R) 02.02.2000 04.02,20003

Ex 542, DFT,0003.0002 Ex 551, AWB,0069.0047 Darryl Borlase Darryl Borlase

Tony Grenenger Tony Grenenger

A4971 {Ex 1453,AWB,0110.0255_R) 02.02,2000 04.02.20003

Ex 542, DFT.0003,0002 Ex 551,AWB.0069.0047 Darryl Borlase Darryl Borlase

Tony Grenenger Tony Grenenger

A4972 (Ex 1453, AWB.0110.0257_R) 02,02,2000 04.02.20003

Ex 542, DFT.0003.0002 Ex 551, AWB,0069.0047 Darryl Borlase Darryl Borlase

Tony Grenenger Tony Grenenger

A49931 (Ex 1455, AWB.0059.0542_R)

A00621 {Ex 1376,AWB,0053.0080_R)

A010r {Ex360,AWB.0059.0123_R)

A0265 (Ex 1459,AWB.0061.0506_R) 14.08.2000 Ex150,AWB.0069.0060 Dominic Hogan Jill Courtney

A0266 (Ex 1460,AWB.0061.0555_R) 14.08.2000 Ex150,AWB,0069,0060 Dominic Hogan Jill Courtney

A0267 {Ex1461,AWB.0061.0520_R) 14.08.2000 Ex150,AWB,0069,0060 Dominic Hogan Jill Courtney

A0430 (Ex 1376,AWB.0137.0376_R) 02.11,2000 Ex 729, AWB,0061,0253 Dominic Hogan Jill Courtney

167 Report of the Oil-for-Food Inqtiir} /

Contract Date Document ID From To

A0552 (Ex171.AWB.0111.0077_R) 27,02.2001 Ex 729, AWB.O111.0069 Dominic Hogan Jill Courtney

A0553 (Ex171.AWB.0111.0085_R) 27,02.2001 Ex 729. AWB.0111.0069 Dominic Hogan Jill Courtney

A0784 (Ex1211,UN0.1214.0142) 22,06.2001 Ex 542. DFT,0004,0147 Dominic Hogan Jill Courtney

A0785 (Ex 1466, AWB.0062.0397_R) 22,06.2001 Ex 542, DFT0004,0147 Dominic Hogan Jill Courtney

Aim

(Ex1211,UN0.1214.0285) 22,01.2002 Ex 729,AWB,0111.0316_R Dominic Hogan Don Cuddihy

A1112 (Ex1217,UN0.0003.0944_R) 22,01.2002 Ex 729,AWB,0111.0316_R Dominic Hogan Don Cuddihy

A1441 (Ex 1444,AWB.0018.0028_R) 24,07.2002 Ex542, DFT,0005,0138 Nigel Edmonds-Wilson

Don Cuddihy

A1670 (Ex 1223,AWB,0060.0343_R)

A1680 (Ex 1224,AWB.0021.0021_R)

Notes

1. Contract A4908 and contracts A4906 and A4907 were concluded witfi Commodity Specialists Co. and Savas Grain respectively. Tiiese contracts were in fulfilment of contracts that IGB had entered into with these traders or their customers. Applications for UN approval for the contracts with the IGB were submitted by the Russian Federation's mission to the UN. AWB relied upon those approvals for the purposes of exporting the grain to Iraq. It wasn't necessary for AWB to submit its contract with the grain trader to DFAT.

2. This is a reply from IWs IVloules. The original facsimile to which this is a response has not been produced.

3. Signed by both parties as required by the United Nations.

168 Report of the Oil-for-Food Iiiqiiiiy

Table 15.2 Permissions to export granted to AWB Limited pursuant Customs (Prohibited Exports) Regulations, 1999 to 2003 to r. 13CA of the (by date of shipment)

Date of shipment Contract number

Date of application for DFAT permission

Date of DFAT permission Delegate who signed

permission Exhibit and ID no.

01.11.99 A4653 07.10,99 08,10.99 IVIs J Drake-Brocl

18.11.99 A4653 19.10,99 25,10.99 IVIs J Drake-Brockman Ex 729, AWB,0058,0234_R

18.11.99 A4653 29.10,99 29,10.99 Ms J Drake-Brockman Ex 729, AWB.0058.0230_R

03.12,99 A4653 12.11,99 16,11.99 Mr G Bowker Ex 729, AWB,0058,0225_R

07.12.99 A4653 19.11.99 1911.99 Ms J Drake-Brockman Ex 729, AWB,0058.0221_R

15.12.99 A4653/A4654 06.12,99 06,12.99 Ms J Drake-Brockman Ex 729, AWB,0058,0215,R

18.12.99 A4654 08.12,99 09.12.99 Ms J Drake-Brockman Ex 729, AWB,0043.0013_R

11.02.00 A4654 24.01,00 25,01.00 Ms J Drake-Brockman Ex 729, AWB,0043.0071_R

13.02.00 A4654 31.01,00 31,01.00 Ms J Drake-Brockman Ex 729, AWB,0043,0015_R

15.02.00 A4654 07.02,00 07,02.00 Ms J Drake-Brockman Ex 729, AWB,0043.0034_R

15.02,00 A4654 29.01,00 31,01,00 Ms J Drake-Brockman Ex 729, AWB,0043,0068_R

19.02.00 A4655 10.02.00 11,02.00 Mr G Bowker Ex 729, AWB,0058.0190_R

21.02,00 A4906 14.02,00 14,02.00 Ms J Drake-Brockman Ex 729, AWB,0057,0100_R

22.02.00 A4654/A4655 10.02,00 11,02.00 Ms J Drake-Brockman Ex 729, AWB.0043.0073_R Ex 729, AWB,0044.0049_R

24.02,00 A4906 14.02,00 14,02.00 Ms J Drake-Brockman Ex 729, AWB,0057,0096_R

29.02,00 A4655 17.02,00 17,02.00 Ms J Drake-Brockman Ex 729, AWB,0058.0186_R

04.03,00 A4908 22.02,00 23,02.00 Mr G Bowker Ex 729, AWB,0056,0142_R

07.03.00 A4655 01.03.00 29.02.00 Mr G Bowker Ex729,AWB,0058,0182 R

Ex 729, AWB,0058,0178_R

16.03,00 A4655 08.03,00 08,03.00 Mr G Bowker Ex 729, AWB,0058,0171_R

16.03,00 transhipped 27.04.00 02.05.00

19.04.00

A4822 08.03.00 08,03.00 Mr G Bowker Ex 729, AWB,0046.0043_R

26.03,00 A4821/A4334 14.03.03 15,03.00 Mr G Bowker Ex 729, AWB,0045,0027_R

26.03.00 A4822/A4907 21.03,00 21,03.00 Mr G Bowker Ex1451,AWB,0046.0087^R

26.03.00 A4907 21.03,00 21,03.00 Mr G Bowker Ex 1452, AWB,0057.0006_R

30.03.00 A490a 24.03,00 24,03.00 Mr G Bowker Ex 729, AWB,0056.0086^R

01.04.00 A4655/A4822 14.03,00 15,03.00 Mr G Bowker Ex729, AWB,0044,0125 R

Ex 729,AWB,0058.0163_R

07.04,00 A4972 31.03,00 03,04.00 Mr G Bowker Ex 729, AWB,0059.0507_R

12.04.00 A4972 07.04,00 11,04.00 Mr G Bowker Ex 729, AWB,0059,0492_R

16.04,00 A4822 11,04,00 11.04.00 Mr G Bowker Ex 729, AWB,0308,0309_R

16.04,00 A4972 04.04,00 06,04.00 Mr G Bowker Ex 729, AWB,0059,0503_R

18.04,00 A4972 13.04.00 13.04.00 Ms J Drake-Brockman Ex 729, AWB,0059.0485_R

19.04,00 A4972 12.04,00 12,04,00 Ms J Drake-Brockman Ex 729, AWB,0059,0486_R

20.04,00 A4972 17.04.00 17,04.00 Mr G Bowker Ex 729, AWB.0059.0478_R

Report of the OU-for-Food Inquiry 169

Date of application Date of

Date of shipment Contract number

for DFAT permission DFAT permission

Delegate who signed permission Exhibit and ID no.

01.05.00 A4972 17.04.00 17.04.00 Mr G Bowl

10,05.00 A4971 20.04,00 20,04.00 Mr G Bowker Ex 729, AWB.0059.0474_R

10,05.00 A4971 04.05.00 08.05.00 Mr G Bowker Ex 729, AWB.0059.0470_R

13,05.00 A4971/A4972 04.04.00 06.04.00 Mr G Bowker Ex 729, AWB,0059.0499_R

13,05.00 A4972/A4971 04.04.00 06.04.00 Mr G Bowker Ex 729, AWB.0059.0499_R

18,05,00 A4971 04.05.00 08.05.00 Mr G Bowker Ex 729, AWB,0059,0467_R

19,05.00 A4971 08.05.00 08.05.00 Mr G Bowker Ex 729, AWB,0059,0461_R

23,05,00 A4971 04.05.00 08.05.00 Mr G Bowker Ex 729, AWB,0059,0464_R

21.06,00 A4971 06.06.00 07.06.00 Mr B Doran Ex 729, AWB.0059.0452_R

06,07.00 A4970 28.06.00 28.06.00 Mr G Bowker Ex 729, AWB.0059.0448_R

25.07.00 A4970 12.07.00 12.07.00 Mr G Bowker Ex 729, AWB.0059.0444_R

01,08.00 A4970 21.07.00 21.07.00 Ms J Drake-Brockman Ex 729, AWB.0059.0434_R

04.08.00 A4970 21.07.00 21.07.00 Ms J Drake-Brockman Ex 729, AWB.0059.0432_R

12.08.00 A4970 02.08.00 03.08.00 Mr G Bowker Ex 729, AWB.0059.0424_R

20.08.00 A4993 11.08.00 14.09.00 Ms J Drake-Brockman Ex 729, AWB.0059.0141_R

25.08.00 A4970 15.08.00 15.08.00 Mr G Bowker Ex 729, AWB.0059.0422_R

29.08.00 A4993 16.08.00 17.08.00 Ms J Drake-Brockman Ex 729,AWB.0059.0137_R

02.09.00 A4993 21.08.00 22.08.00 Ms J Drake-Brockman Ex 729, AWB.0053.0092_R

04.09.00 A4970 21.08.00 22.08.00 Ms J Drake-Brockman Ex 729, AWB.0059.0418_R

10.09.00 A0101 23.08.00 23.08.00 Ms J Drake-Brockman Ex 729,AWB,0059.0015_R

20.09,00 A0062 23.08.00 23.08.00 Ms J Drake-Brockman Ex 729,AWB,0059,0129_R

23.09.00 A0101 14.09.00 15.09,00 Ms J Drake-Brockman Ex 729,AWB.0059,0011_R

10.10.00 A0266/A0101 02.10.99 03.10,00 Ms J Drake-Brockman Ex 729, AWB.0059.0007_R

12.10.00 A0266 04,10,00 04,10,00 Ms J Drake-Brockman Ex 729,AWB.0061.0319_R

25.10.00 A0266 10.10.00 10.10.00 Ms J Drake-Brockman Ex 729,AWB.0061.0355_R

01.11.00 A0266 17.10.00 19,10.00 Mr G Bowker Ex 729, AWB.0061.0349_R

02.11.00 A0266 20.10.00 20.10,00 Mr G Bowker Ex 729, AWB.0061.0346^R

06.11.00 A0265 25.10.00 25.10.00 Ms J Drake-Brockman Ex 729,AWB.0061.0339_R

06.11.00 A0265 25.10.00 25,10,00 Ms J Drake-Brockman Ex729,AWB.0061.0340_R

11.11.00 A0265 01.11.00 02.11.00 Ms J Drake-Brockman Ex 729,AWB.0061,0335_R

Ex 729, AWB.0107.0171_R

03,12,00 A0265 23,11,00 24.11.00 Ms J Drake-Brockman Ex 729,AWB.0061.0331_R

04,12,00 A0266 23.11.00 24.11.00 Ms J Drake-Brockman Ex 729, AWB.0083.0372_R

24,12.00 A0265/A0266 12.12.00 14.12.00 Ms J Drake-Brockman Ex729,AWB.0061.0323 R

Ex 729, AWB.0107.0174_R

31.12.00 A0267 19.12.00 20.12.00 Ms J Drake-Brockman Ex729,AWB.0005.0010_R

22,01,01 A0266 08,01,01 08.01.01 Mr W Richardson Ex 729, AWB.0083,0388_R

22,01.01 A0266 08,01,01 08.01.01 Mr W Richardson Ex 729, AWB.0083.0428_R

29,01.01 A0267 15.01,01 15,01.01 Mr W Richardson Ex 729, AWB.0111.0024_R

170 Report of the Oil-for-Food Ii i qi i i iy

Date of shipment Contract number

Date of application for DFAT permission

Date of DFAT permission Delegate who signed

permission Exhibit and ID no.

01.02.01 A0267 24.01,01 24.01.01 MrGAWn Ex 729,AWB.0061.0295_R

02.02.01 A0266/A0267 24,01,01 24.01.01 MrG AWn Ex 729,AWB.0061.0294_R

12.02,01 A0267 01.02,01 01.02.01 Mr G Atkin Ex 729,AWB.0061.0287_R

13.02.01 A0267 24.01,01 24.01.01 MrGAtkin

Mr W Richardson Ex 729,A\A/B.0061.0293_R Ex 729, AWB.0061.0291_R

23.02.01 A0267 05.02,01 05.02.01 MrGAtkin Ex 729,AWB.0061.0280^R

26.02.01 A0267 08.02,01 09.02.01 MrGAtkin Ex 729,AWB.0061.0285_R

05.03,01 A0267 23.02,01 23.02.01 Mr G Atkin Ex 729,AWB.0061.0272_R

05.03,01 A0267/A0430 23.02,01 23.02.01 MrGAtkin Ex729,AWB.0061.0271 R

Ex 729,AWB.0061.0272_R

17,03,01 A0430 06.03,01 08.03.01 Mr G Atkin Ex 729,AWB.0061,0224_R

31.03.01 A0430 20.03.01 21.03.01 Mr G Atkin Ex729,AWB.0061.0211_R

01,04,01 A0430 19.03.01 19.03.01 Mr G Atkin Ex 729,AWB.0061,0216_R

06.04.01 A0430 27.03,01 27.03.01 MrGAtkin Ex 729,AWB.0061.0200_R

08,04,01 A0430 23.03.01 23.03.01 Mr G Atkin Ex 729,AWB.0061,0207_R

11,04,01 A0430/A0553 02.04,01 02.04,01 MrGAtkin Ex 729,AWB.0061.0043_R

11,04,01 A0553 03.04.01 03.04.01 MrGAtkin Ex 729,AWB.0061.0039_R

12,04,01 A0430 27.03,01 27.03.01 MrGAtkin Ex 729, AWB.0061.0204_R

25.04.01 A0553 11.04.01 11.04.01 Mr G Atkin Ex 729,AWB.0061.0035_R

26,04,01 A0552 18.04,01 18.04.01 Mr G Atkin Ex 729, AWB.0061,0147_R

01,05,01 A0553 23.04,01 23.04.01 Ms C Birgin Ex 729,AWB.0009.0214_R

03.05,01 A0552 16,04.01 18.04.01 Mr G Atkin Ex 729,AWB.0061,0143_R

09,05,01 A0552 30.04,01 01.05.01 Mr B Doran Ex 729, AWB.0007,0207_R

19.05.01 A0552 08,05.01 08,05.01 MrGAtkin Ex 729,AWB,0061,0136_R

24,05,01 A0552 11.05.01 11.05.01 Mr G Atkin Ex 729,AWB.0061,0132_R

28,05,01 A0553 11.05.01 11.05.01 Mr G Atkin Ex 729,AWB.0061.0029_R

01.06,01 A0553 22.05.01 22.05.01 Mr G Atkin Ex 729,AWB.0061,0025_R

19.06,01 A0552 04.06.01 04.06.01 MrGAtkin Ex 729,AWB.0061.0128_R

24.06.01 A0553 31.05.01 31,05.01 Mr G Atkin Ex 729, AWB,0061,0021_R

07.07,01 A0552 25.06.01 25.06.01 MrGAtkin Ex 729, AWB.0008.0088_R

15.07.01 A0552 25.06.01 25,06.01 Mr G Atkin Ex 729, AWB.0008,0184_R

31.07.01 A0552 11.07.01 11.07.01 Mr G Atkin Ex 729,AWB.0061,0118_R

Ex 729, AWB,0107,020 7_R

06.08.01 A0553 23.07.01 23,07,01 Mr G Atkin Ex729,AWB,0061,0017 R

Ex 729,AWB,0010,0154_R

07.08.01 A0552 19.07.01 19,07.01 Mr G Atkin Ex 729,AWB,0061.0114_R

Ex 729,AWB,0008,0316_R

15.08.01 A0553 31.07.01 31.07.01 Mr G Atkin Ex 729.AWB.0061.0013_R

Ex 729, AWBOOl 0,0168_R

28.08,01 A0553 08.08.01 09,08.01 Mr G Atkin Ex 729, AWB,0061,0009_R

Ex 729, AWB,0010.0228_R

171 Report of the Oil-for-Food Inqtiir} /

Date of shipment Contract number

Date of application for DFAT permission

Date of DFAT permission Delegate who signed

permission Exhibit and ID no.

29.08.01 A0552 13.08.01 Mr G Atkin Ex729,AWB.0061.0110_R

03.09.01 A0553 08.08.01 09.08.01 Mr G Atkin Ex729,AWB.0061.0004 R

Ex 729, AWB.0010.0357_R

13.09.01 A0784 07.09.01 10.09.01 Mr G Atkin Ex 729, AWB.0062.0466_R

30.09.01 A0784 17.09.01 17.09.01 Mr G Atkin Ex 729, AWB.0062.0462_R

11,10.01 A0784 18.09.01 18.09.01 Mr G Atkin Ex 729, AWB.0062.0456_R

09.11.01 A0784 29.10.01 29.10.01 Mr G Atkin Ex 729, AWB.0062.0450_R

20,11,01 A0784 29.10.01 29.10.01 Mr G Atkin Ex 729, AWB.0062.0446_R

24,11,01 A0785 13.11.01 13.11.01 Mr G Atkin Ex729,AWB.0062.0313 R

Ex 729, AWB.0107.0219_R

28,11,01 A0784/A0785 13.11.01 13.11.01 Mr G Atkin Ex 729,AWB,0013,0101_R

12,12,01 A0785 02.12.01 03.12,01 Mr G Atkin Ex 729, AWB.0062.0309 R

Ex 729,AWB.0013.0271_R

19.12.01 A0785 11.12.01 11.12.01 Mr G Atkin Ex729,AWB.0062.0301 R

Ex 729, AWB.0107,0223_R

21,12.01 A0785 11.01.01 11.12,01 Mr G Atkin Ex 729, AWB.¤062.0305 R

Ex 729,AWB.0107.0222_R

28,12.01 A0784 18.12.01 18.12.01 MrW Williams Ex 729, AWB.0062.0443_R

04.01.02 A0784 21.12.01 27.12.01 Mr W Williams Ex 729,AWB.0012.0038_R

06.01.02 A0785 24.12.01 27.1201 MrW Williams Ex 729,AWB.0013.0481_R

06,01.02 A1441 17.12.02 17.12.02 Mr J Quinn Ex 729, AWB.0¤60.0382_R

23.01.02 A0785 02.01.02 02.01.02 Mr G Atkin Ex 729, Awb.0062,0293_R

23.01.02 A0785 17.01.02 17.01.02 Mr G Atkin Ex 729, AWB.¤062.0283_R

24.01.02 A0785 09.01.02 09.01.02 Mr G Atkin Ex 729, AWB.0062.0289_R

27.01.02 A0784 08.01.02 08,01.02 Mr G Atkin Ex 729, AWB.0062.0435_R

02,02,02 A0785 17.01.02 17.01.02 Mr G Atkin Ex 729, AWB.0062.0278_R

12,02.02 A0784 01.02.02 01.02,02 Mr G Atkin Ex 729, AWB,0062.0429_R

21,02.02 A0784/A0785 11.02.02 11.02.02 Mr G Atkin Ex 729, AWB.0062.0423_R

09.03.02 A0784 25.02.02 28.02.02 Mr G Atkin Ex 729,AWB.0062.0415_R

14.03.02 A1112 05.03.02 05.03,02 Mr G Atkin Ex 729, AWB.0062,0070_R

15.03.02 A0785 01.03.02 01.03.02 Mr G Atkin Ex 729, AWB.0062.0260_R

31,03.02 Aim 19.03.02 19.03.02 Mr G Atkin Ex 729,AWB.0062.0171_R

02,04.02 A1112 22.03.02 22.03.02 Mr G Atkin Ex 729, AWB.0062.0065_R

09.04.02 A1112 03,04,02 03.04.02 Mr G Atkin Ex 729. AWB.0062.0054_R

23,04,02 A1112 11,04.02 11.04,02 Mr G Atkin Ex 729, AWB.0062.0048_R

24,04.02 A1112 27.03.02 28.03,02 Mr G Atkin Ex 729, AWB.0062.0060_R

03,05.02 Aim 22.04.02 22.04,02 Mr G Atkin Ex 729,AWB.0062.0165_R

16.05.02 A im 26.04.02 26.04.02 Mr G Atkin Ex 729, AWB.0062.0159_R

22.05,02 A1112 26.04.02 26.04.02 Mr G Atkin Ex 729, AWB.0062.0043_R

23.05.02 A1112 15.05.02 15.05.02 Mr G Atkin Ex 729, AWB.0062.0038_R

172 Report of the Oil-for-Food Inqtiir}/

Date of shipment Contract number

Date of application for DFAT permission

Date of DFAT permission Delegate who signed

permission Exhibit and ID no.

26.05.02 Aim 14,05.02 14,05,02 Mr G Atkin Ex 729, AWB,0062,0154_R

02.06.02 A im 17,05.02 20,05,02 Mr G Atkin Ex 729,AWB.0062.0149^R

03.06.02 A m2 17.05.02 20.05.02 Mr G Atkin Ex 729, AWB,0062,0032_R

09.06,02 Aim 28,05.02 28,05,02 Mr G Atkin Ex 729, AWB,0062.0143_R

Ex 729,AWB,0015.0340_R

18.06,02 A im 03.0602 03.06,02 Mr G Atkin Ex729, AWB,0016,0072_R

28.06.02 Aim 03,06.02 03,06,02 Mr G Atkin Ex 729,AWB.0016.0125_R

03.07.02 A im 24.06.02 24.06.02 Mr G Atkin Ex 729, AWB,0062,0130 R

Ex 729, AWB,0016,0185^R

09.07.02 A1112 24.06.02 24.06.02 Mr G Atkin Ex 729, AWB,0062,0028 R

Ex 729, AWB,0017,0357 *R

26.07,02 Aim 11.07.02 11.07,02 Mr G Atkin Ex729,AWB,0016,0203 R

Ex 729,AWB,0062,0125_R

31.07.02 Am2 15.07.02 17,07,02 Mr G Atkin Ex 729, AWB,0062,0023_R

14.08,02 A1112 25.07.02 25.07.02 Mr G Atkin Ex 729,AWB.0062.0012^R

25.09.02 A im 16.09.02 16.09,02 Mr J Quinn Ex 729, AWB,0062,0117_R

16.10,02 A m2 02,10.02 02.10,02 Ms C Birgin Ex 729, AWB,0062,0006_R

Ex 729, AWBOOl 7,0538_R

10.11.02 A1441 29.10.02 29,10,02 MrJ Quinn Ex 729, AWB,0060,0407^R

24.11.02 A1441 08.11.02 11.11.02 MrJ Quinn Ex 729, AWB,0060,0403_R

30.11.02 A1441 18.11.02 18.11,02 MrJ Quinn Ex 729, AWB,0060,0397^R

24.12.02 A1441 11.12.02 11.12.02 MrJ Quinn Ex 729, AWB,0060,0392_R

30.12.02 A1441 16.12.02 16.12.02 MrJ Quinn Ex 729, AWB,0060,0387_R

03.02.03 A1441 20.01.03 21.01,03 Mr D Hennessy Ex 729, AWB.0060.0377_R

21.02.03 A1441 (subseq. transferred to A1680)

10,02.03 10.02.03 Ms V Owen Ex 729, AWB,0060,0365_R

21.02.03 Al 680 {formerly A1441) 10,02.03 10.02,03 Ms V Owen Ex 729, AWB,0308,0067^R

02.03.03 A1441 {subseq. transferred to A1680)

28,01.03 28.01.03 MrJ Quinn Ex 729, AWB.0060.0371_R

20.04.03 A1441 27.03.03 27.03.03 Ms V Owen Ex 729, AWB.0060.0360_R

06.05.03 A1441 14,04,03 15.04,03 Ms V Owen Ex 729, AWB,0060.0356 *R

07.05.03 A1441 28,04.03 28.04.03 Ms V Owen Ex 729, AWB.0060.0351_R

08.05.03 A1680 29,04,03 29.04,03 Ms V Owen Ex 729,AWB.0060.0015_R

14.05.03 A1680 29,04,03 29.04,03 Ms V Owen Ex 729, AWB.0060.0009^R

26.05.03 A1441 28.04.03 28.04.03 Ms V Owen Ex 729, AWB.0060,0346_R

07,06.03 A1680 28.05,03 27.05,03 MrJ Quinn Ex 729, AWB.0060,0003_R

173 Report of the Oil-for-Food Inqtiir}/

Appendix 16 Mr Emons and Mr Watson:

emails and file note, June to

July 2000

Figure 16.1 Email from IVlr Emons and Mr Watson to Mr Officer, 1 June 2000

iuiimii A W p . 0 1 0 2 . 0 0 7 7 _ |^

michsel wat!iDntBCape.ne(> oi 02106/2000 19:26:05

To Marise Wilson/MO/AWBÆAWe. Roben Brennand/HOiAWB@AWB

cc Michael Tighe/H0/AW3@AWB, Edward Laskie/HO/AWBaAWB, Robert Srennard/HOWWBgAWB, Tiacy VaghiMOiAWB@AWB, Richard NoriisJHOiAWB@AWS, Mark Emons/HO/AWBgAWB. Miciiael Watson,'HO'AWe@AWa. nwaisonaut@neis;ape,nel

Sub;e=l Re; [Re: irai) " Demmsge Issue)

To: Nioel Officer

From : Kark Eraons/Michael k'otson

Date : Isc Juhe, ivwnsn, Jotdon

Re; Iri

Arrived Iraq L Tue JO/i piª

Msetinqs held on Wed 31/5 ul-ti Mr V0U3´i - Directoi Cenerai

Mis Moana

Dr. Obeldy

Mr avjhair

Vdcious technLcal

Etalt

Departed Iraq ! Thursday 3/6

porposc of Meeting '

- X-Ogtsdical issjea ot Umm Oasr,

- Reason f ar potential delay

- Projected demurrage expens´

- Ooallcy issuea

- Strategy to oddreas issues

- Ful-ure business

H.B l u J ly acunoi'jeogc the build cp uf v e s s e ls ot u!" Qasr ard delay being

a i ^ h l ve advised as ioUcws to the reasons why this has occurred

v e s s e ls -Testmq/Insacts/Retestlng for hlacK point

2) J v e s s e ls - re-tested due potential e - c o li

These = ªre ex shd .ay well linked to the transhipping crewl

Report of the Oil-for-Food hiquin/ 1 75

AWB.0102.0070 ^^

J) P,ec>ve also compo'jnded by a nuinber of vesseis uitr no p^iostoxin onboarrt ªiia ir, ona inaiance th´ v^siel was tequicei to leave the C-istta

until phoatoin

from otnec v e s s e l s,

4) Tescif\9 and rft-cesuinq at bertrª , - dje q u i l i ty of cargo - this now changed to anchor - r e s u l ts not yet Xnoun

3) Fomigdtioji at. byrth due live insccts :

- this riDV changed ro anchor, Vessels ªviiich l e ft Austtaiia with no phostcxir.

have b ¨en supplied Hy other vessels, wLtr. tablets b^j-ag delivered afichor lo

vessels ª^'.airirig

( l .e vessels forced to try borrow phostorin from other vessels with extra

supplies havlaq

to be supplied at Fujavran, vessels enroute to Umre Qasi , dii/erc´d to pic^t op

auppiiea)

in instarvces v e s s e ls by at tre anchor ´s hq phcsiOKir? Ofibcard lo

´nabie furniqaLion, thereby mcreaaxng thair w^itiriq timfi.

4) Anticipated ivetage discharge rate for 4 bertha :

No.l - 5000

No.2 - saoo

No.3 - 400U

Si 16 - 9000

total e*pecce4 mt p^rday

This rot currenciv being

aj IvsrU of spare pacts

b) Lack ot iTiaintftnance

c5 damage to

IGB ´Kpect to jncie^ae s i lo berth Co 15,000 mt with rep^icª Completed Co 4th

ftcm

with turcher increase of around 5-70OO rii, once spares received for vacuvacocs

thet&by total of about J4-36.000 mt per day

5) Sth Berth now beirg conmissioned, this su^Ar berth and machinery needs to

b´ overhauled, Mlniscficial permission being sniighr to expedite same

6} Current projected darrurrage t;

The demurrage proiections hÙve usÍd ª nuTJser of assomptxong wnich incorrect especially in face of ongoing facts and onsioing stracegies by both AWB/IGS and

which were pAintcd out by IQB.

7) D.G, Yousef - personally taken ch‚nSiG and will be v i s i t i ng Uinrfi QÙSt or

waekly

basisat the instruction of r.he Minister to ensure ongoing action.

Trucks arc available to met incr^as^d discharg´ rate.

8) August 99 - IGB contracted 16 new Veyd˘ vacuv‚tors, same has been blocked

by

UM - Tim Snowball to be give" deiaiia with request follow up with UN

ftVlB tk> try and assise expediting delivery of machines

9i IGa have provided l i se of spare parts, essential for maintenance Of current

machinery kWB w i ll seek to a s s i st supply of same

176

Report of the Oil-for-Fooii Inquiri/

IIUIIIIIil AW1B.0102.0079. iO

10) Rwb have requested AWB suppiy 8 bobcats to a s s i st in discharge operation

of the

v e s s el

11) P o t e n t i al of mobile cranes c-nbo‡id gearleaa v e s s e ls to a s s i st in

0i5Charga o p e r a t i on

Thi5 now being i n v e s t i g a t ed to source supply

lil) Severe drought in Iraq has caused thefi^ to use 650,000 Pt from reserve

Stocks wnich

to be replaced. Herto f a r t h er urqercy from IGB to ir.ctease di^charqe

13) IGB r e c o g n i se current aemurrage pain, houÁvÁr in z j h a ir woras " we fvave

had a

lonq term reletiorsTiip v i tr Awp ur;eieby ir pas', years awb r.as esrne<Ô despaccÓi and

IGB has never asX^d Cor reduction"

IGB f u l ly prepared La a s s i st tp scjr.e iocn oi compensation in fut ure c o n t t ‚ c t s,

e i t h er

by r e d u c t i on of ctucking fe^ or in.cres´* in p r i c es end have ˚sked fo^ supply

of f u c c h er

lmi).ll˚f, lone

f u t u re S t r a t e g y:

- Defer balance of C‡rga of appr;´ itt urttil end Joly- AuQUSt

- Meeting tn be £cranqed at i n i t i al Jtag´ upon re t urn of Wacsori/Emons with

N . O f f i c er

and Ted L´skie to discuss ‚bove issue-s anck cesolve same.

M a rk W i ll o f f i ce nn M o n d a y, M i c h a el w i ll be in o f f i ce a f t er l u n ch H a n d ay

r e g a r ds

Emons/wa.cson

" M a r i ae W i l s o n"

Robert,

further to R i c h a r d 's message, eouid you please contact Mark Emons (GS4M) aad

r-Jicnael Waison (Cnarterin^J next flcnday ss thsy i-'ill fct tftcV- :n the ´ f f i :-a f t er

v i s i t i ng I r aq t h is w e e k. A sumir.ary of t he issues h as b e an preparftd. I em

e x p e c t i ng a f u c ^ h ec r e p o rt f t o^ t h en l a t er t o d ay aftd t h ey w i ll be able to

gi-ve y ou t h is a nd p r o v i de ftirther v e r b al conundnts on M o n d a y,

Regards Nigel O f f i c er

Richard N o i r is

01/06/2000 06:12

To; Nigel officer/HO/AWBJftWE, Michael Tighe/tÏO/AWBflAWD, Edward LiSkie/HO/AW0iJAWa CCI Robert Btennand, Tracy Vegh

S u b j c ct : I r eq ^ D e m u r r a ge I s s ue

Nigel/ Michael and Ted

177 Report of the Oil-for-Food Inqtiir} /

ti

AWB.0102.0¤8¤

F u t t h ir tc raeetinq lasr e v s n i rj (31/51 with Michael and Nigfl, I

unaorstand chat tne cStes groups a f f e c i ec by t h is issue - Cfiartetlng, G5 i M

E.port Pricinj - are to prepai´ a statement o£ the issues as they see chem.

Rs ! ´ill h´ or leave fro^n 2/6 to lB/6. please contact Robtit ater^nnnd -

E.t 2Å’34- whom : have briefed or, this issje. 1/ necessary to co:iticr me

please calk to rracy Vcgrt Eut

Regticds Richacd

Get~yolJr en FBEE, (jcrsonal Neti.ape u . t K a il arroutit today ªt

h t t p ; / / w e b m a x l . n ´ t s c a p e . c o m.

%

it

Source: Ex 1376, AWB.0102.0077_R.

178 Report of the Oil-for-Food Inqtiir} /

Figure 16.2 Mr Emons' file note regarding 'AWB visit to IGB, Iraq', 13 June 2000

FJLE NOTH : Confidentiil.

From: Mark Emtws

Date; 13 June 2000

.Subjtcl: AWn visit IO 1GB. Iraq

AWB 0176.0024

Purpose of visit.

1. To discuss / resolve ongoing discharge problems al Umni Qasr.

2. Discuss future needs ( Phase 8) under UN Food for Oil program

Background.

For the 1999 / 2000 season the AWB hss sold a record 2.4 million lorncs to Iraq. ITiis business has been conducted direct to the IGB and two Russian companies, .As a consequence of this tonnage bemg sold AWB has shipped \\-hai is in effect 98 % of the supply of svheai to

Iraq,

The facility at Umm Qasr has been under intense pressure from the AWB shipment program. This volume has coincided with sx change of Director General at the IGB on ! January 2000 and a dramatic decline in discharge capacity sincc mid Febniary 2000.

Outcomc.

On \\cdnesdaj 71 Ma\ meetings where held with ot'ticials cf 1GB Attendees from IGB where Mr Yousif R-thman D.ij , Mrs Moona, Exec. Dr Oheidy. Technical rep. and a aentlenian from the Engineering Dcpt

During the first round of meetings AWB highlighted the sudden downtuiri in discharge rates at Umm Qasr. In reply IGB admitted that the discharge rate had beer effecled significantly by damage to the -ith gantry of the silo. After further discussion it was admitted that maintenance and spare pans for the Vigan \actiators was causing funher delays. 1GB highlighted thai they had placed an order before the LIN for tlie supply of-I permanent and 12 mobile v.icuaiots but this had been delayed ' refused by the UN.

During the momini; mectinL' a request was made of AWB to supply K bobcats. .A request lo supply wire cabling and some simple parts was also made. This was agreed to b\- .AWB, , AW15 also_ujidenook to seek clurificaiion through A\VB New York of ihc reasons for thL-delay in approval of the discharging equipment NOTE: These parts are being sourced in Dubai and will be delivered on the first av ailable vessel and quotes are being sort for the bobcats.

rsfe lliii

Report of the OU-for-Food Inquiry 179

B l L N O I E l Conndcnlial . A W B 0 1 7 6 0 0 2 5

Durini ; discussio n wii h IG B th e AW B propose d th.i t a meihoi i o f recoverin g th e cos i ol ' demurrag e woul d b e l o hol d par t o r al l o i th e truckin g fe e o r a s a n aliertialtv e ther e coul d b e ft reduclin n fo r futur e contracts . Discusan n t o a degre e too k plac e howeve r i l wa s clea r tha t th e optio n o f AW U holdin g par t o r fill o f ih e truckin g fe e woul d no t b e acceptabl e t o th e Ministe r ( an d ilicrcfor e ih e Regime) . I t becam e clea r tha t ther e wa s som e confusio n i n th e IG B a> = l o ih e amoun t o f truckint ; due . wil h explanation s tha t th e rai c o n ih c A ^ ' B contract s differen t l o tha t charjie d t o som e Ru.ssian . Tha i an d .Algeria n companies , Comnien l wa s mad e tha t th e Ministe r ha d propose d l o increas e th e truckini J fe e t o US D 1 8 pe r tonn e fo r phas e S ccmtract i bu t a t ih f lim e o f Ih e meetm c Ji o approva l ha d bee n recei v e d fro m th e President .

Th e forme r Direeio r Genera l fo r th e 1G B an d no w adviso r l o Ministe r Sala h DrZuhai r joine d u s fo r lunch . H e ha d bee n wel l briefe d prio r t o joinin g u s fro m hi s immediat e comment s o n ih e di.icharg e problems . H e opene d vviil i ih c commen t tha t althoug h th e AW B wa s sufferin g som e immediat e problem s whic h wa s recognise d b y Ira q w e ha d ciijo \ e d period s o f considerabl e earning s o f dispatch . Hi s commen t o n Truckin g cost , mad e privatel y awa > from th e mai n grou p a s w e departe d th e re.iiaurani . wa s lha l h e ha d ad v isc d ih c Ministe r t o conside r reducin g cost s bu t i f ihi s di d occu r ther e coul d b e a considerabl e increas e i n ih e cost s o f th e "afte r sale s service " required .

IDiirm g th e final meetin g th e ICi H u i i d c t i L i o k t o immediatel y increas e discharg e fro m 12.00 0 tonne s pe r da y t o 15.00 0 tonne. s an d ihci i wit h th e supplie s o f w ir e etc . fro m Duba i a n e>.peete d ou t tur n o f 22.00 0 coul d b e achieved . Detail s o f gearin g machiner y neede d fo r th e sil o wa s passe d t o .AW B wit h ih e clea r inten i ih e thi s woul d b e sourcec l fo r ili e IGB .

I n thi s fina l meetin g ih e prospeei. s fo r ih e nex t phas e ( S ) an d th e likel y tonnage' s involve d an d shipmen t perio d wa s discussed . Clearl y th e drough t effectin g th e entir e regio n ha s ha d a dramati c cffec t o n Ira q wit h rcser\e-' ; o f whea l reduce d b > 650.00 0 to/uies . The y inten d caliin g fo r th e nex t phas e durin u .'un e an d aske d i f tii e .AW B woul d agai n loo k favourabl y o n i.uppl):n g Ih e Russia n (.unipaiiies .

.A s a postscript , w e departe d Baghda d earl y on th e mornin g o f I June . Ou r arriva l a t th e borde r wa s me t wit h som e e.-icitemen t an d i t becam e obviou s tha i w e coul d no t procec d immediatel y fo r som e reason . Afte r som e 2 hour s I wa s calle d t o th e phon e t o spea k wit h Ministe r Saln h J n essenc e h e aske d th e AW B t o conside r supplyin g som e 1 millio n ioru)e s l o \ iiriou s companie s previousl y contracte d t o suppl y Canadian . Needles s t o sa y I a^jrec d tha t ut f woul d Indee d b e prepare d l o suppl ) thes e companie s an d w e crosse d th e border .

r s j , J i x :

Source : E x 438 , AWB.0176.0024 .

1 8 0 Report of the O il- for - Food l i i q i i i r i /

Figure 16.3 Email from Mr Watson to Mr Rowland, 17 July 2000

U0029

From: Mark Rowland

Sent: Monday, 17 .July 2OC0 3:16: DO PM

To: Fecer Geary; Charles StiOtt; Robin Beaumont; Rex Lister; Andrew Tyas; Sarah

Scales; Middle Easr Acct Mgrs; Peter Jones; Nack Gomersall

CC: Chartering Copy

Subject: Iraq Report

Dear All,

Fol recvd from Michael Watson re recent visit to Iraq.

Brgds MCR

Forwarded by Mark Rowland/HO/AWB on 17/07/20C0 15:14

michael wacson on 17/07/2000 02:11:50 TO: Mark. Rowlend/HO/AWBSAWB CC :

Subject: Iraq Report

Dear Mark,

I would appreciate if you could forward the following to

R Beaumont/C.Stott/P.Geary/D.Hogan/Rex Lister/Stu Richardson

thanks

Iraq Visit

Team consisting of :

Don: Hogan Peter Hart

Dean McCullvm

Michael Watson

Meetings held with :

IGB

Minister IGB

DG - Yousef

Ziihair

various technical personal

Purpose of meeting

- Discuss various technical issues relating to quality of cargo

- testing procedure of cargo

- rejection of 14,000 mt loaded onboard Pacific Champ

AWB. 5040.0247

181 Report of the Oil-for-Food liiqiiiri /

- Charterin g issues , relatin g t o discharg e races / balanc e o f shipment s

unde r curren t phase / equipmen t a t discharg e por t

- I f feasibl e trave l t o Urarr , Qasr t o se e th e p o r t

O u t c o m e

T e c h n i c a l / m a r k e t i n g discussi on s  t o b e p r o v i d e d "b y P. Harc/Do m Hoga n i n seperat e repor t

C h a r t e r i n g

- 4 berth s currentl y i n us e to r AW B tonnag e

- 3 v e s s e l s currentl y dischargin g

- 3 v e s s e l s presentl y wai tin g a t pilo t statio n

- S i l o b e r t h bein g dredge d t o increas e dept h a t b e r t h t o exces s 1 2 m ,

m a i n t e n a n c e wor k bein g carrie d ou t t o increas e d i s c h a r g e rat e t o

exces s lo. oo o pe r d a y , hopi n g t o achiev e abou t I2, o0 a m t p / d a y

si l o bert h expecte d t o b e operationa l o n / a b o u t 2 0 Jul y

- 5 bert h bein g activated , a s ye c n o d i s c h a r g e equipmen t availabl e a n d

o r d e r ha s al read y bee n pl ace d t o Viga n fo r e q u i p m e n t , U N approva l require d

fo r th e p u r c h a s e

- I G B wis h fo r th e balanc e o f th e curren t p h a s e t o b e expedite d an d

c o m p l e t e b y no t late r tha n 1 5 S e p t . Youse f ha s u n d e r t a k e n no t les s tha n

20, 00 0 m t pe r da y discharg e onc e wor k o n Sil o bert h complete d (abou t 2 0 July )

I f Si l o achieve s abou t 1 200 0 an d othe r berth s aroun d 400 0 e a c h , shoul d

b e a b l e di scharg e appr x 24, 00 0 m t pe r da y

Visi t t o Um m Q a s r

Do m Hoga n Mi chae l Watso n A W B ' s p r o t e c t i v e agen t

- T r a v e l tim e e x Bagdha d 6 hr s eac h wa y - roa d O K bu t no t a s goo d

a s Jordan/Bagdha d - H e a v y m i l i t a r y p r e s e n c e , wit h numerou s chec k poi nt s

- t e m p e r a t u r e hotte r tha n Bagdha d (abou t 4 9 de g C )

- Me t wit h M a n a g e r o f th e por t an d als o I GB' s ma n i n Um m Qas r

- wen t t o al l berth s an d wen t onboar d A m a r a n t o s t o vie w di scharg e

- M o b i l e v a c u v a t o r s use d o n eac h o f th e v e s s e l s , 6 vacuvator s fo r

eac h v e s s e l , di schargin g 3 h o l d s .

- V a c u v a t o r s o f smal l typ e an d loo k i n nee d o f repair s

' D i s c h a r g e rat e slow s a t carg o i s reduce d i n eac h h o l d , an d ver y slo w

whe n abou t 200 0 m t lef t i n th e hol d a s necessar y fo r carg o t o b e m a n u a l l y

shovell e d int o th e centr e o f th e hol ds , h e n c e nee d fo r b o b c a t s t o assis t

i n ra: oving th e carg o int o th e centr e o f hold s

- 3 vessel s waiti n g requir e fumigatio n du e t o heav y investatio n

take s abou t 6 day s t o fumigat e

- I G B advis e n o sealin g tap e bein g place d on . v e s s e l s a t loa d p o r t , phostoxi n

tablet s ar e p l a c e d o n eac h vesse l bu t n o sealin g tap e

- testi n g p r o c e d u r e canno t b e conducte d a t pil o t stati on , a s thi s abou t

6 hr s fro m por t b y tugboa t an d no t I G B pers. onne l canno t trave l ou t

t o th e v e s s e l s t o o v e r s e e col lectio n o f s a m p l i n g .

- Col lectio n o f sampl e therefor e onl y abl e o n c e v e s s e l ha s berthe d

a n d resul t o f testin g take s abou t 3- 5 d a y s . Thi s bein g furthe r

d i s c u s s e d b y Hart/Hoga n wit h I G B

AWB.5040.024 8

1 8 2 Report of the Oil-for-Food lii qi ii r i /

- InspeGti Q n o f carg o a t pilo t statio n ca n b e don e an d i f insect s detecte d

the n fumigatio n ca n b e don e a t th e p i l o t statio n

- Dea d rate s hav e bee n detecte d i n cargo , nee d t o revie w inspectio n

p r o c d u r e o f v e s s e l , prio r c o loadin g t o ensur e tha t rat s no t fro m th e

vessel s

- Cotechn a - me t wit h p e r s o n n e l a t Um m Qas r (offic e als o i n Bagdhad )

agree d t o provid e the m wit h Re x Liste r emai l addres s fo r an y discussio n

o n document s et c Cotechn a - no t permitte d t o advis e dat e whe n document s despatche d fro m Um m Qas r an d woul d no t giv e an y indicatio n a s t o averag e tim e take n t o

proces s documents , othe r tha n fac t tha t document s ar e complete d afte r

eac h vesse l ha s complete d discharg e an d sen t of f accordingly .

- Sample s o f carg o sen t t o thei r offic e i n Amma n

- Metho d o f w e i g h i n g d i s c u s s u e d . Do m H o g a n t o provid e furthe r d e t a i l s .

- N o shortag e o f truck s a p p a r e n t , aroun d 100 0 truck s waitin g a t th e por t

- railwa y als o i n us e

Conclusio n

- Equipmen t i s a n issu e an d th e ongoin g maintenance/spare s e t c .

- Sampl e collectio n an d testin g thereof , need s t o b e reviewe d a s clearl y

thi s doe s hav e a n impac t o n d i s c h a r g i n g term s

- Hatc h sealin g tap e need s t o b e place d o n eac h vesse l a t loa d por t togethe r

wit h phostoxi n tablet s

- Fumigatio n procedur e need s t o b e reviewe d a s potentia l los s o f 6 day s

a t discharg e p o r t , du e t o nee d t o f u m i g a t e , thi s ma y improv e onc e

weathe r i n Ira q become s coole r - Bo b cat s shoul d b e sen t soones t t o assis t discharg e operatio n

I t I S clea r tha t I G B ar e committe d t o ensurin g tha t th e dischargin g rate s a t

Umr n Qas r ar e increase d an d al l effort s ar e bein g directe d i n thi s respec t an d

clearl y the y d o appreciat e th e assistanc e o f AW B i n thi s

respec t

Regard s Michae l Watso n

Ge t you r ow n FREE , persona l N e t s c a p e W e b M a i l accoun t toda y a t h t t p : / / w e b m a i l . n e t s c a p e . c o m .

AWB.5040.024 9

Source : E x 675 , AWB.5040.0247 .

Report of the Oil-for-Food Incjuiry 1 8 3

Appendix 17 Inland transportation fees,

November 1999 to

September 2000

Table 17.1 Payments of inland transportation fees, November 1999 to September 2000

Manner of payment

Date of shipment AWB contract

paid directly to Alia

Paid to Alia shipowners

via Tse Yu Hyundai

Hong IVIetal IVIerchant Atlantic and Limited lUlarine Orient Shipping

1/11/99 A4653

18/11/99 A4653

18/11/99 A4653

3/12/99 A4653

7/12/99 A4653

15/12/99 A4653/A4654

18/12/99 A4654 "/I

11/02/00 A4654 ys

13/02/00 A4654

15/02/00 A4654

15/02/00 A4654

19/02/00 A4655 " "12

21/02/00 A4906

22/02/00 A4654/A4655

24/02/00 A4906

29/02/00 A4655

4/03/00 A490B yn

7/03/00 A4655 yiSi

16/03/00 A4655

26/03/00 A4821/A4334 yiQ

26/03/00 A4822/A4907

30/03/00 A4908 /22

1/04/00 A4655/A4822 "'23

7/04/00 A4972 "24

12/04/00 A4972

Report of the Oil-for-Food Incjuiry 185

Manner of payment

Date of shipment AWB contract

paid directly to Alia

Paid to Alia via Tse Yu Hong Metal

Limited

Paid to Alia via other shipowners

Hyundai Merchant Marine

Atlantic and Orient Shipping

16/04/00 A4822

16/04/00 A4972 ^27

18/04/00 A4972 y 28

16/03/00, 27/04/00, 02/05/00, 19/04/00

A4822 /29

19/04/00 A4972 ^30

20/04/00 A4972

1/05/00 A4972 ^32

10/05/00 A4971

10/05/00 A4971 V-34

13/05/00 A4972/A4971

18/05/00 A4971

19/05/00 A4971 ""37

23/05/00 A4971 v^38

21/06/00 A4971 ^39

6/07/00 A4970 ^40

25/07/00 A4970

1/08/00 A4970 "42

4/08/00 A4970

12/08/00 A4970

25/08/00 A4970

4/09/00 A4970

Notes

Ex

Ex

Ex

Ex

Ex

Ex

Ex

8. Ex

9. Ex

10. Ex

11. Ex

12. Ex

1.

2,

3.

4.

5.

6.

7.

1447, AWB.0042.0009.

1447, AWB.0042.0080_

1447, AWB.0203.0014.

1447,AWB.0163.0028.

1447, AWB.0042.0263_

1447, AWB.0042.0336.

1448,AWB.0203.0017.

1448, AWB.0064.0011.

1448,AWB.0064.0011_

1448, AWB.0064.0011.

1448, AWB.0064.0011.

1449,AWB.0064.0011_

,R (90%) and AWB.0042.0007_R (10%).

R (Payment Request).

R (Invoice); AWB.0163.0016_

R (Invoice); AWB.0163.0029J

R (Invoice); AWB.0042.0262,

R (Invoice); AWB.0042.0334_

,R (Invoice); AWB.0043.0007_

R(90%) andAWB.0163.0068.

R (90%) and AWB.0163.0068

R (90%) and AWB.0163.0068

R(90%) and AWB.0163.0068.

R (90%) and AWB.0163.0068

R (Payment Request).

R (Payment Request).

R (Payment Request).

R (Payment Request).

R (Payment Request).

L R ( 1 0 % ).

l_R(10%).

i_R(10%).

l_R(10%).

._R(10%).

186 Report of the Oil-for-Food lii qiiiri/

13 . E x 1445 , AWB.0047,0020_ R (90%) . N o document s hav e bee n produce d evidencin g th e paymen t o f th e 10 % balance , althoug h ther e i s n o materia l befor e th e Inquir y t o sugges t tha t thi s balanc e wa s no t paid .

14 . E x 1448 , AWB.0064.0011_ R (90%) . N o document s hav e bee n produce d evidencin g th e paymen t o f th e 10 % balance ,

althoug h ther e i s n o materia l befor e th e Inquiry t o sugges t tha t thi s balance m s no t paid .

15 . E x 1445 , AWB.0087.0081_ R (90%) . N o document s hav e bee n produce d evidencin g th e paymen t o f th e 10 % balance , althoug h ther e i s n o materia l befor e th e inquir y t o sugges t tha t thi s balance wa s no t paid .

16 . E x 1449 , AWB0087.0081_ R (90%) . N o document s hav e bee n produce d evidencin g th e paymen t o f th e 10 % balance , althoug h ther e i s n o materia l befor e th e Inquiry t o sugges t tha t thi s balance wa s no t paid .

17 . E x 1446 , AWB.0163.0112_ R (90%) . N o document s hav e bee n produce d evidencin g th e paymen t o f th e 10 % balance , althoug h ther e i s n o materia l befor e th e Inquiry t o sugges t tha t thi s balanc e wa s no t paid .

18 . E x 1449 , AWB.0087.0081_ R (90%) . N o document s hav e bee n produce d evidencin g th e paymen t o f th e 10 % balance , althoug h ther e i s n o materia l befor e th e Inquiry t o sugges t tha t thi s balanc e wa s no t paid .

19 . E x 1449 , AWB.0163.0122_ R (Payment Request) .

20 . E x 1450,AWB.0045.0013_R .

21 . E x 1452 , AWB.0046.0079_ R an d E x 1451 , AWB.0046.0079_ R (Payment Request) .

22 . E x 1446,AWB.0163.0125_R .

23 . E x 1449 , AWB.0163.0125_ R (Payment Request) .

24 . E x 1455 , AWB.0052.0020_ R (Invoice , Hyunda i Merchan t Marine ) an d AWB.0052.0022_ R (Paymen t Request) .

25 . E x 1455 , AWB.0052.0118_ R (Invoice , Hyunda i Merchan t Marine ) an d AWB.0052.0119_ R (Paymen t Request) .

26 . E x 1451 , AWB.0052.0251_ R (Payment Request) .

27 . E x 1455 , AWB.0087.0193_ R (Invoice ) an d AWB.0052.0251_ R (Payment Request) .

28 . E x 1455 , AWB.0163.0215_ R (Invoice , Hyunda i Merchan t Marine ) an d AWB.0052.0182_ R (Paymen t Request) .

29 . E x 1451 , AWB.0046.0035_ R (Paymen t Request) .

30 . E x 1455 , AWB.0052.0308_ R (Invoice , Hyunda i Merchan t Marine ) an d AWB.0052.0307_ R (Paymen t Request) .

31 . E x 1455 , AWB.0052.0278_ R (Invoice ) an d AWB.0052.0251_ R (Payment Request) .

32 . E x 1455 , AWB.0052.0253_ R (Invoice ) an d AWB.0052.0251_ R (Paymen t Request) .

33 . E x 1454 , AWB.0051.0044_ R (Invoice , Hyunda i Merchan t Manne ) an d AWB.0051.0043_ R (Paymen t Request) .

34 . E x 1454 , AWB.0051.0087_ R (Invoice ) an d AWB.0051.0109_ R (Paymen t Request) .

35 . E x 1454 , AWB.0163.0250_ R (Paymen t Request) an d E x 1455 , AWB,0163.0250^ R (Payment Request) .

36 . E x 1454 , AWB.0051.0130_ R (Invoice ) an d AWB.0051.0157_ R (Paymen t Request) .

37 . E x 1454 , AWB.0051.0171_ R (Invoice , Hyunda i Merchan t Marine) ; AWB.0051.0167_ R (Paymen t Request) ; AWB.0051.0159^ R (Payment Request) .

38 . E x 1454 , AWB.0051.0214_ R (Invoice ) an d AWB.0051.0242_ R (Paymen t Request) .

39 . E x 1454 , AWB.0051.0251_ R (Invoice ) an d AWB.0051.0250_ R (Paymen t Request) .

40 . E x 1453 , AWB.0050.0009_ R (Invoice ) an d AWB.0050.0010_ R (Paymen t Request) .

41 . E x 1453 , AWB.0050.0020_ R (Invoice , Hyunda i Merchan t Marine ) an d AWB.0050.0019_ R (Paymen t Request) .

42 . E x 1453 , AWB,0050.0057_ R (Invoice ) an d AWB.0050.0053_ R (Paymen t Request) .

43 . E x 1453 , AWB,0050.0098_ R an d AWB.0050.0097_ R (Paymen t Request) .

44 . E x 1453 , AWB.0050.0175_ R (Payment Request) .

45 . E x 1453 , AWB,0050.0191_ R (Payment Request) .

46 . E x 1453 , AWB.0050.0218_ R (Invoice ) an d AWB.0050.0217_ R (Paymen t Request) .

Report of the Oil-for-Food Incjuiry 1 8 7

Figure 17.1 AWB Limited pays 100% of the inland transportation fees to Alia directly

Inland transportation fees

AWB Chartering pays directly to Alia 100% of the inland transportation fees for the shipment, prior to the vessel's arrival at Umm Qasr

Freight

AWB Chartering pays ocean freight to the shipow/ner for the carriage of the wheat to Iraq upon completion of loading and

at the rate provided for in AWB's contract of affreightment/voyage charterparty with the shipowner

100%

188 Report of the Oil-for-Food liiqiiiri/

Figure 17.2 AWB Limited pays inland transportation fees directly to Alia but in two instalments

Report of the Oil-for-Food Incjuiry 189

Figure 17.3 AWB Limited pays inland transportation fees to Alia indirectly, through the shipping companies as intermediaries

190 Report of the Oil-for-Food liiqiiiri/

Figure 17.4 AWB Limited pays inland transportation fees to Alia indirectly through shipping companies as intermediaries

AWB CHARTERING

Freight

AWB Chartering pays freight to the shipowner for the carriage of the wheat to Iraq

This is at the rate provided for in AWB's contract of affreightment/charterparty with the shipowner and an amount sufficient to cover both (a) the inland transportation fees payable in respect of the shipment and (b) the ocean freight payable to the shipowner for the carriage of the shipment to Iraq

Shipowner pays inland transportation fees to Alia on behalf of AWB in one of two ways

Shipowner retains portion of funds received from AWB Chartering on account of ocean freight

Method 1 Method 2

The shipowner pays 100% of the inland transportation fees to Alia prior to the vessel's arrival at Umm Qasr

The shipowner pays 90% of the inland transportation fees to Alia prior to the vessel's arrival at Umm Qasr and the remaining 10% after completion of

discharge of the wheat

Report of the Oil-for-Food Incjuiry 191

Figure 17.5 The first way AWB Limited paid inland transportation fees to Alia through Tse Yu Hong Metal Limited as intermediary

192 Report of the Oil-for-Food liiqiiiri/

Figure 17.6 The second way AWB Limited paid inland transportation fees to Alia through Tse Yu Hong Metal Limited as intermediary

Report of the Oil-for-Food Incjuiry 193

Figure 17.7 The third way AWB Limited paid inland transportation fees to Alia through Tse Yu Hong Metal Limited as intermediary

AWB Chartering pays Tse Yu Hong Metal Limited an administration support fee of US$0.20

per tonne AWB Chartering pays Tse Yu

Hong Metal Limited 100% of the inland transportation tees payable for the shipment for payment onto Alia on AWB's

behalf

Freight

AWB Chartering enters into contract of affreightment/ voyage charterparty with shipowner for carriage of

shipment to Iraq

AWB Chartering pays freight to shipowner at rate provided for in contract of affreightment/voyage

charterparty

TSEYU HONG METAL LIMITED (as nominee of Ronly Holdings Limited)

Inland transportation fees

From the freight it receives from AWB, Tse Yu Hong Metal Limited pays inland transportation fees to Alia *90% prior to the vessel's

arrival at Umm Qasr and 10% balance after completion of discharge

194 Report of the OU-for-Food Inqu ini

Figure 17.8 The fourth way AWB Limited proposed to pay inland transportation fees to Alia through Tse Yu Hong Metal Limited as intermediary

Report of the Oil-for~•ooii Inciuirv 195

Figure 17.9 Metliods by which AWB Chartering obtained reimbursement from the AWB Pool for inland transportation fees paid

FIRST METHOD

Freight

AWB Chartering invoices AWB Pool for cost of freight for shipment to Iraq

This is at the rate agreed as between AWB Chartering and the AWB Pool and sufficient to cover the ocean freight payable

by AWB Chartering to the shipowner whose vessel was chartered to carry the wheat to Iraq

SECOND METHOD

Freight

AWB Chartering invoices AWB Pool for cost

of freight for the shipment to Iraq

This is at the rate agreed as between AWB Chartenng and the AWB Pool and sufficient to cover:

" the inland transportation fees paid by AWB Chartering

" the ocean freight payable by AWB Chartering to the shipowner whose vessel was chartered to carry the wheat to Iraq

Inland transportation fees

AWB Chartering invoices AWB Pool separately for the inland transportation fees paid by AWB Chartering in respect of the shipment

196 Report of the Oil-for-Food liiqiiiri/

Appendix 18 Mr Stott's knowledge of

inland trucking^ late 2000 and early 2001

This appendix analyses Mr Stott's evidence concerning his knowledge of the inland trucking arrangements as at late 2000 and early 2001.

Mr Stott's evidence and his six tests

The substance of Mr Stott's evidence v^as to the following effect:

" Upon taking up his position as General Manager, he made inquiries of employees of AWB and 1GB to satisfy himself that the payments complied with sanctions.^

" He spoke to, amongst other, Mr Watson and Mr Hogan.^ He was told by Mr

Watson and others that the trucking fees had been approved by the United Nations.3 He saw that the approvals that went to the United Nations referred to the wheat being delivered to all governorates in Iraq. This corroborated what he had been told.^

" He was told that Ronly was used as a means of distancing AWB from the

payments.5 He did not accept this explanation.'' He thought that the true reason was to benefit Ronly'' and to allow the AWB employees responsible to steal money from the company.Æ Accordingly, he stopped the method of transferring funds to Alia.

" As a result he engaged Arthur Andersen to determine whether there was any improper behaviour occurring within the marketing group. ^

" Following his 'mission' to Iraq in October 2000 he developed a concern that the Iraqis might be benefiting from the trucking fees.^" He discussed these concerns with Mr Goodacre and Mr Hogan." In response to his inquiry as to what he knew about the trucking arrangements, Mr Hogan stated that he did not know anything about them, that they had all been put in place by Mr Emons and Mr Watson, that he understood that they had the full support of the board and that they had been approved by the United N a t i o n s . ^^

Mr Stott then performed six tests to satisfy himself that the Iraqis were not benefihng from the trucking fees.

Report of the Oil-for-Food Incjuiry 197

First , M r Stot t tol d t h e Iraqi s tha t h e p r o p o s e d w r i t i n g t o D F A T a b o u t th e u s e o f Alia.^-' ' H e a s s u m e d tha t th e Iraqi s w o u l d h a v e p r o t e s t e d i f the y di d no t w a n t h i m t o tal k

a b o u t th e us e o f t h e J o r d a n i a n t r u c k i n g c o m p a n i e s . T h e y d i d no t protest .

Second , h e w r o t e t o M s C o u r t n e y a t D F A T o n 3 0 Octobe r 2000 , s e e k i n g D F A T ' s a p p r o v a l t o e n t e r int o discussion s w i t h J o r d a n i a n t r u c k i n g c o m p a n i e s ostensibl y t o enabl e th e p r o m p t d i s c h a r g e o f A u s t r a l i a n w h e a t . ^ ^ T h a t lette r stated :

Dea r Jill ,

Th e purpos e o f writin g i s t o ensur e tha t DFA T i s comfortabl e wit h AW B proceedin g wit h th e approac h outline d below . A s previousl y discusse d w e ar e currentl y experiencin g problem s managin g ou r Ira q business . Th e firs t proble m concern s Unite d Nation s procedura l issues , whic h w e wil l documen t i n a separat e note .

Th e secon d issu e is , vessel s dischargin g a t Um m Qas r suffe r lon g delay s an d a s a consequenc e AW B incur s substantia l demurrag e bills . Ou r recen t missio n identifie d tha t th e slo w discharg e o f vessel s i s cause d b y a lac k o f truck s a t discharg e port .

Fo r you r guidance , Jorda n base d truckin g companie s ar e responsibl e fo r arrangin g truck s a t discharg e port . T o rectif y th e problem , w e propos e enterin g int o discussion s wit h th e Jorda n truckin g companie s wit h a vie w t o agreein g a commercia l arrangemen t i n orde r t o ensur e tha t ther e ar e enoug h truck s t o enabl e th e promp t discharg e o f Australia n whea t cargoes .

W e believ e th e propose d solutio n wil l eloquentl y solv e ou r proble m an d loo k forwar d t o receivin g you r response .

Than k yo u i n anticipation .

O n 2 N o v e m b e r 2000 , M s D r a k e - B r o c k m a n , th e Assistan t Secretar y o f D F A T ' s M i d d l e Eas t a n d A f r i c a n Branch , r e s p o n d e d :

Dea r M r Stott ,

Than k yo u fo r you r communicatio n outlinin g th e manne r i n whic h yo u propos e t o procee d t o dea l wit h problem s yo u hav e encountere d i n dischargin g vessel s o f you r whea t export s t o Ira q a t Um m Qas r port . A s yo u hav e explaine d t o u s th e delay s i n discharg e wer e

causin g yo u t o incu r substantia l demurrag e cost s an d affectin g th e viabilit y o f you r trade .

W e understan d that , o n you r recen t visi t t o Baghdad , yo u identifie d th e sourc e o f th e proble m a s bein g a lac k o f truck s a t th e discharg e point . Thes e truck s ar e supplie d b y Jordan-base d companies . Yo u therefor e propos e t o ente r int o discussion s wit h th e Jorda n truckin g companie s wit h a vie w t o agreein g t o a commercia l arrangemen t i n orde r t o ensur e

tha t ther e ar e enoug h truck s availabl e t o enabl e th e promp t discharg e o f Australia n whea t cargoe s whe n the y arrive .

W e hav e examined , a t you r request , thi s propose d cours e o f actio n an d ca n se e n o reaso n fro m a n internationa l lega l perspectiv e wh y yo u shoul d no t proceed . Tha t is , thi s woul d no t contraven e th e curren t sanction s regim e o n Iraq .

1 9 8 Report of the Oil-for-Food liiqiiiri /

Internationa l Lega l Divisio n ha s bee n consulte d i n th e preparatio n o f thi s response .

I trus t thi s i s o f assistanc e t o you.i ^

M r Stot t sai d tha t M s Drake-Brockma n tol d him , afte r sh e sen t th e letter , tha t DFA T wa s awar e o f Alia , ha d looke d a t i t an d tha t Ali a wa s 'okay'.i ^

Third , M r Stot t though t tha t Australia n an d friendl y intelligenc e service s woul d hav e contacte d AW B ha d the y detecte d an y irregularitie s arisin g fro m th e payment s t o Alia .

Fourth , h e sen t a n emai l t o th e Directo r Genera l o f 1 G B suggestin g tha t i t sel l whea t allocate d t o Russia n trader s o n th e basi s tha t IG B foreg o som e o r al l o f th e truckin g costs .

M r Stott' s evidenc e i n thi s regar d wa s a s follows :

Do m [Hogan ] an d I talke d abou t thi s message , an d 1 sai d t o Dom , 'Wha t I a m concerne d about , Dom , i s ther e ma y b e som e benefi t goin g to ' —'th e Iraqi s ma y b e providin g som e benefi t fro m thes e truckin g arrangements . I f th e Iraq i ministe r come s bac k an d say s tha t h e

i s prepare d t o forg o thos e truckin g fees , the n I a m goin g t o b e satisfie d tha t h e i s actuall y controllin g th e truckin g fee s an d the y ma y no t b e truckin g fees . I f h e come s bac k an d says , "No , w e can' t d o that" , the n I' m goin g t o b e satisfie d tha t the y ar e truckin g fee s tha t nee d t o b e paid.'21 '

O n 2 0 Octobe r 2000 , M r Stot t wrot e t o D r Sale h suggesting :

You r Excellency , w e migh t b e abl e t o fin d a solutio n i f th e IG B wer e prepare d t o foreg o th e truckin g fee , o r adjus t th e contrac t qualit y (ie ) suppl y AS W rathe r tha n Hard.^ i

Accordin g t o M r Stott , h e wa s tol d tha t th e Iraqi s coul d no t foreg o th e truckin g fees . Whe n h e aske d M r Abdul-Rahma n wh y tha t wa s so , h e wa s told :

'Wel l ho w els e ar e w e goin g t o b e abl e t o mov e th e grai n aroun d i f w e don' t hav e th e foreig n exchang e t o pa y fo r th e truckin g feesP'^ s

Fifth , M r Stot t mad e arrangement s t o spea k t o th e forme r Director-Genera l o f th e IGB , M r Daoud , becaus e h e wa s sur e tha t M r Daou d woul d tel l hi m th e detail s o f th e truckin g arrangements . M r Daou d die d befor e M r Stot t coul d spea k t o him.^ s

Sixth , M r Stot t sai d h e sa w writte n confirmatio n fro m th e IG B tha t th e truckin g fe e o f US$4 5 pe r torm e ha d bee n approve d b y th e Unite d Nations . Tha t confirmatio n too k th e for m o f a n IG B genera l contrac t sen t t o th e Unite d Nations.^» ^

Report of the Oil-for-Food Incjuiry 1 9 9

Assessmen t o f M r Stott' s evidenc e

Th e evidenc e o f M r Stot t concernin g hi s si x test s shoul d no t b e accepted .

No t on e o f th e si x test s wa s intende d t o generat e a n unequivoca l answe r t o th e questio n o f whethe r AW B wa s complyin g wit h sanctions .

M r Stot t ha d acces s t o bot h interna l an d externa l lawyer s wh o coul d hav e give n advice . H e di d no t sugges t tha t h e too k u p thi s opportunity .

M r Stot t gav e evidenc e that , followin g hi s missio n t o Iraq , h e aske d M r Tuoh y o f Arthu r Anderse n t o investigat e th e Ira q truckin g arrangements.- ' M r Tuoh y di d no t recal l suc h request.^ ^ Howeve r i t i s clea r fro m Arthu r Andersen' s repor t tha t n o reques t wa s mad e tha t tha t fir m investigat e AWB' s complianc e wit h sanctions.-' ^

Further , M r Stot t coul d hav e aske d DFA T directl y abou t compliance , bu t di d not . Th e term s o f hi s facsimil e o f 3 0 Octobe r 200 0 expresse d n o concer n tha t th e Iraqi s migh t b e benefitin g fro m th e truckin g fee s o r tha t AW B wishe d t o chec k it s complianc e wit h sanctions ; rathe r i t was , o n it s face , directe d t o th e differen t questio n o f whethe r AW B coul d ente r int o discussion s wit h th e Jordania n truckin g companie s wit h a vie w t o agreein g a commercia l arrangemen t i n orde r t o ensur e tha t ther e wer e enoug h truck s

t o enabl e promp t discharg e o f whea t cargoes .

On e woul d expec t a ma n o f M r Stott' s intelligenc e wh o wa s concerne d abou t th e lawfulnes s o f hi s company' s activitie s i n a n importan t marke t t o obtai n advic e directl y o n th e issu e an d documen t it . M r Stot t di d neither . I t ca n b e inferre d tha t M r Stot t

refraine d fro m makin g a direc t inquir y becaus e h e feare d th e answer .

Further , i t i s clea r fro m wha t i s se t ou t i n Chapte r 2 0 tha t M r Stot t setde d th e facsimil e t o DFA T t o obfuscat e rathe r tha n clarif y th e tru e position . I t i s conclude d i n tha t chapte r that :

 M r Stot t wa s th e autho r o f th e amendment s t o tha t gav e ris e t o th e secon d versio n o f th e facsimile .

 M r Stot t delete d fro m th e draf t a referenc e t o th e whea t contrac t incorporatin g a 'predetermine d an d U N approve d transpor t fee'.^ i

 ther e wa s n o referenc e i n th e secon d draf t o r th e fina l versio n o f thi s facsimil e t o AWB' s contract s wit h th e IG B bein g o n a fre e i n truc k basi s o r containin g a n obligatio n upo n AW B t o pa y a n inlan d transpor t fee.^ ^

 ther e wa s n o referenc e i n th e secon d draft , o r an y subsequen t iteration , t o AW B seekin g t o introduc e a performanc e incentiv e schem e t o spee d th e rat e o i discharg e o r th e proble m whic h ha d hithert o blocke d suc h a schem e —namel \ that :

2 0 0 Report of the Oil-for-Food liiqiiiri /

'the inclusion of the transport fee in the contract [with the 1GB] reduced AWB's ability to negotiate rates directly with the [Jordanian] transport company'.^^

As a result, the reader of Mr Stott's facsimile of 30 October 2000 would not have:

" understood the terms of AWB's contract with 1GB generally

" appreciated that AWB paid a 'predetermined' transport fee

" inferred, as was the case, that IGB determined the transport fee, or

" learned that AWB had been paying the transport fees over the preceding twelve months.

Further, Mr Stott did not tell DFAT anything about how the trucking fee had been negotiated. By this time, moreover, he had been told that all of the trucking fees had been paid to the IGB.^^

The asserted purpose of the approach to DFAT *to agree upon mechanisms with transport providers^^ *was only tangentially relevant to the question of whether or not the Iraqis were benefiting from the arrangements in breach of sanctions. In any event, however, Mr Stott could never have hoped to have obtained from DFAT an informed response. He asked the Department to comment upon the proposed arrangement without giving it relevant information about that arrangement.

In these circumstances, this exchange of correspondence could not provide comfort to AWB. Mr Stott's amendments indicated that AWB's letter was carefully drawn with a view to obscuring relevant information from DFAT. Mr Stott's motive to write to DFAT was a desire to create what he called a 'paper trail' which would protect AWB in the event that the contracts with Iraq came under scrutiny.^^

The other matters relied upon by Mr Stott are now considered.

Assurances from AWB employees

Mr Stott's evidence concerning the assurances he received should not be accepted where the United Nations had not been told of the circumstances in which the trucking fees had been imposed or to whom the fees were in fact paid.^^ Mr Stott did not suggest he was told anything about how the United Nations came to give its

approval to the contracts. Moreover it is clear that Mr Stott *on his evidence * harboured concerns about the Iraqis benefiting from the contracts, notwithstanding that all earlier contracts had been approved by the United Nahons. Approval by the

United Nations simply begged the question of how that approval was forthcoming, and Mr Stott already had reason to be concerned about the inland trucking arrangements generally.

Report of the Oil-for-Food Incjuiry 201

Further , i t i s objectivel y unlikel y tha t an y assuranc e M r Stot t receive d wa s s o straight -forward . I t i s clea r tha t thos e involve d i n considerin g IGB' s deman d tha t a truckin g fe e b e pai d understoo d that :

 th e inlan d transpor t fe e wa s fixe d b y Ira q

 i t wa s bein g pai d t o Ira q fo r th e benefi t o f th e Iraqi s

 th e metho d o f paymen t ha d no t bee n approve d

 AW B ha d t o fin d a metho d o f paymen t whic h wa s agreeabl e t o th e Iraqi s

 AW B wa s no t prepare d t o rais e wit h th e Unite d Nation s th e transportatio n fe e issu e fo r fea r i t migh t b e prohibite d b y th e Unite d Nations , thu s costin g AW B it s Ira q marke t

 on e metho d o f paymen t suggeste d b y Ira q wa s paymen t t o a n Ira q ban k i n Amman .

Thes e peopl e include d Messr s Emons , Watso n an d Hogan .

Ther e i s n o reaso n t o believ e tha t thes e peopl e woul d hav e withhel d wha t the y kne w fro m M r Stott . M r Watson , fo r example , ha d full y co-operate d wit h Arthu r Anderse n whe n describin g th e Ronl y transaction . M r Hogan , i n Februar y 200 1 wa s blun t i n

assessin g tha t th e Iraqi s wer e enrichin g themselve s throug h th e servic e charge.'' ®

Further , M r Stott' s evidenc e o n thi s issu e wa s unsatisfactory :

Q : S o ho w di d yo u dra w an y comfor t fro m a statemen t 't o b e delivere d t o al l governate s i n Iraq ' o n th e questio n o f whethe r o r no t th e paymen t o f thi s truckin g fe e ha d bee n approve d b y th e UN ?

A : 1 wa s tol d b y m y colleagues , whe n I arrive d a t th e AWB , t o star t —o n 1 July , tha t thes e arrangement s ha d bee n pu t i n plac e i n 1999 , an d the y ha d bee n thoroughl y investigate d an d 1 wa s give n comfor t b y thos e ther e a t tha t tim e tha t i t wa s full y approve d b y th e Unite d N a t i o n s . 3 5

However , i t becam e apparen t tha t n o on e ha d i n fac t assure d M r Stot t tha t th e issu e ha d bee n 'thoroughl y investigated' :

Q : Wh o tol d yo u the y ha d bee n thoroughl y investigated ?

A : M r Hogan , M r Hughes , M r Liste r sai d tha t h e wa s awar e o f them , an d M r Watso n ha d sai d tha t h e wa s payin g the m an d i t ha d bee n —i t wa s goin g throug h tha t mechanism .

Q : Di d anybod y us e th e word s 'thoroughl y investigated' ?

A : The y ma y no t hav e use d th e word s 'thoroughl y investigated' .

Q : Di d anybod y us e th e wor d 'investigated'? .

2 0 2 Report of the Oil-for-Food liiqiiiri /

A : The y ma y no t hav e use d th e vv'or d 'investigated' .

Q : Wer e yo u tol d anythin g othe r tha n tha t th e truckin g fe e ha d bee n approve d b y th e UN ?

A : 1 wa s tol d tha t th e truckin g fe e wa s approve d b y th e U N an d wa s bein g pai d throug h Ronly .

M r Stott' s evidenc e tha t h e ha d bee n tol d o f a 'thoroug h investigation ' wa s false . I t ha d n o foundatio n whatsoever .

Furthe r still , an y comfor t h e migh t hav e d r a w n fro m hi s staf f coul d oiil y hav e bee n dispelle d b y M r Hogan' s Februar y 200 1 tri p repor t whic h unequivocall y asserte d tha t th e increas e pointe d t o Iraq i exploitatio n o f th e escro w account .

Finally , M r Stot t acknowledge d t o AWB' s solicitor s i n Septembe r 200 4 tha t i n effec t h e di d no t receiv e an y adequat e assuranc e tha t th e contract s were , indeed , approve d b y th e Unite d Nations . I n paragrap h 10. 1 o f a draf t statemen t prepare d i n hi s nam e M r Stot t asserted :

whils t a n emai l tha t 1 receive d fro m Domini c Hoga n date d 2 Novembe r 200 0 state s tha t [th e phas e 9 fee ] woul d b e approve d i n writing.. . b y th e U N i t woul d hav e bee n m y responsibiUt y t o obtai n thi s approval . I d o no t recal l eve r receivin g suc h a writte n approval.- "

Forewarnin g IG B o f hi s approac h t o DFA T

M r Stott' s evidenc e wa s generall y unreliable . Instance s se t ou t i n thi s appendi x an d Chapte r 2 0 provid e a prope r basi s fo r thi s conclusion . Hi s evidenc e shoul d no t b e accepte d unles s corroborated .

Ther e i s n o corroboratio n here . N o othe r witnes s state d tha t th e approac h occurred . Ther e i s n o writte n recor d o f it . M r Stot t di d no t sugges t tha t h e sen t a draf t o f hi s lette r t o DFA T t o IGB .

I n an y event , an y communication s wit h IG B i n term s a s obliqu e a s hi s lette r t o DFA T o f 3 0 Octobe r 200 0 coul d hardl y b e expecte d t o generat e a stron g reactio n fro m IGB .

Finally , ther e i s n o mentio n o f thi s approac h i n M r Stott' s statemen t o f evidenc e t o thi s I n q u i r y . M r Stot t referre d i n tha t documen t t o th e draftin g o f hi s lette r t o DFA T an d discussion s wit h DFA T officer s abou t th e letter , bot h befor e an d afte r i t w a s written.^ ^ I t woul d hav e bee n eas y an d natura l fo r M r Stot t t o refe r i n thi s contex t t o an y discussio n wit h IGB . H e di d not . Hi s failur e t o d o s o i s evidenc e tha t thi s exchang e di d no t occur .

Report of the Oil-for-Food Incjuiry 2 0 3

Intelligenc e service s

M r Stot t coul d hav e n o legitimat e expectatio n tha t intelligenc e agencie s woul d contac t AWB . The y migh t hav e goo d r e a s o n s - s u c h a s preservin g th e confidenhalit y o f thei r source s —fo r no t contactin g AWB . I n an y event , i t i s no t th e functio n o f intelligenc e agencie s t o safeguar d th e interest s o f commercia l entitie s o r t o war n the m tha t the y migh t b e i n breac h o f th e crimina l law .

Th e evidenc e abou t th e Russia n trad e

Thi s evidenc e wa s no t corroborate d i n an) ^ way . M r Stott' s allege d conversatio n wit h th e Directo r Genera l o f th e 1G B wa s important ; however , n o fil e not e o f tha t conversatio n ha s bee n produce d an d th e substanc e o f wha t h e sai d i s no t recorde d i n an y othe r AW B document . I t wa s no t referre d t o i n M r Stott' s witnes s statement.^- '

M r Hogan' s evidenc e doe s no t suppor t M r Stott' s account . H e state d tha t th e reques t t o remov e th e truckin g fe e represente d merel y a proposa l b y whic h AW B trie d t o reduc e th e pric e t o matc h th e sam e pric e a s th e Russia n trader s ha d a g r e e c i . - ^ ^

Further , th e letter s sen t wer e no t suitabl e fo r th e tas k suggeste d b y M r Stott , i n tha t eac h suggeste d anothe r optio n t o satisf y IGB' s requirements . Th e facsimil e sen t o n 2 0 Octobe r 200 0 suggeste d th e offe r o f AS W rathe r tha n har d wheat.-^* ^ O n 5 Decembe r 2000 , M r Hoga n sen t a n emai l suggestin g anothe r optio n —a n alternativ e por t o f

discharg e w a s identified .

Th e letter s lef t ope n th e possibilit y tha t th e Iraqi s migh t accep t on e o f thes e alternative s withou t commentin g on e wa y o r th e othe r abou t th e truckin g fees . The y ar e consisten t wit h AW B engagin g i n norma l commercia l discussions .

Fo r thes e reasons , th e evidenc e o f M r Hoga n shoul d b e accepte d i n preferenc e t o M r Stott's .

Th e IG B contrac t

M r Stot t sai d tha t i n Februar y 200 1 h e aske d t o b e show n proo f tha t th e Unite d Nation s ha d approve d th e truckin g fees.^ » Hi s evidenc e wa s tha t h e sa w a documen t whic h disclose d a truckin g fe e o f US$44.50'^^ , an d tha t thi s documen t looke d lik e th e 'norma l approva l not e tha t wen t .. . t o th e U N fro m th e Iraqis.' ^ o Thi s documen t se t ou t th e contractua l arrangement s betwee n buye r an d seller.^ i M r Stot t suggeste d tha t someon e withi n AW B ha d create d tw o set s o f Iraq i contractua l document s fo r th e purpos e o f deceivin g m a n a g e m e n t . ^ ^

Fo r th e reason s se t ou t elsewhere , M r Stott' s evidenc e mus t b e rejected . Th e documen t referre d t o di d no t exist.^ ^

2 0 4 Report of the Oil-for-Food liiqiiiri/

Mr Stott's instructions to lawyers *2004 and 2005

Mr Stott was interviewed by Mr Quennell in approximately April 2004 on which occasion Mr Quennell took notes.The notes refer to Mr Stott's letter to DFAT and this entry is considered elsewhere. Otherwise the notes do not suggest that Mr Stott implemented any process of testing the propriety of the inland trucking fees. There is not the slightest relevant reference in them to:

" forewarning IGB of his intention to write to DFAT

" his placing reliance on intelligence agencies

" his writing concerning the Russian contracts, or

" his seeing the contract sent to the United Nations.

Mr Stott's draft witness statement, dated 12 September 2004^5 likewise makes no relevant reference to these matters. Indeed it refers to the dispute which arose after AWB decided not to fill the Russian contracts in late 2000, without however referring

to Mr Stott's alleged attempt to test the motives of IGB and his purported communication with Mr Abdul-Rahman.

There is no reason why Mr Stott would have withheld from AWB's solicitors any exculpatory material. It is evident that Mr Stott had an opportunity to say what he knew from at least approximately April 2004 to September 2004. His failure to refer to his alleged tests corroborates the conclusion that he never deployed them.

Further, there is other evidence that indicates that Mr Stott actually knew that the trucking fees were, at least in part, being received by the Iraqi government.

On 25 February 2005, Mr Stott sent an email to Mr Hargreaves commenting on a position paper prepared by AWB's solicitors^^:

Report of the Oil-for-Food Incjuiry 205

AWB.aOOE.D274 ^r?

Charies Slott/HO/AWB

25.'02/2005 15:34

''S-'

To Peter Hargreaves/HO/AWB

bcc

LPL.027.019

Subject Re: Fw: Project f^ose - turther v/ersion ol position paper

Peter,

Very good position paper. However a tew suggestions as follows:

" Bottom of page 1 and top of page 2. It is important lo establish a long term association with

Alia During the Iran.'lraq war 1980 to 1988 and up until 1990 all shipments to Iraq

(approximately 3 million lonnes each year) were shipped through Aqaba.Juraan and then

irarsported by road 18D0km to Baghdad, a sigrificanl logistical program that resulted in 100,000 truck movernents each year The port ot Umm Qasr was closed as it was in the

middle ol Ihe war ione. During this period two trucking companies were involved, Iraq Land

Transport Company and Jordan Land Transport company, both operated from the same

building in Jordan In the same street as the Australian Embassy We understood one was

owned by the Iraq Ministry of Transport and the other by the Jordan Ministry ol transport, these two companies merged at some stage in the BO's lo become the Iraq Jordanian Land

Transport company and subsequently changed its name to Alia-

" top of page 3, as per point above, always assumed that Alia was a JV between tHe govt's of

Iraq and Jordan.

" the bonom of page 3 in response to question in italics . ..we assumed that all our UN

applications would be discov^red by our major competitor, the US Wheat Associates, we

therefore did not want our major cjimpetitor to have any access to commercial information that they might use against us in the'niarket place.

" page 5 question 3... always assumed this to be the case given the Alia's heritage.

" page 5 question 4 Alia was the monopoiy supplier of Land Transporl Services there was no

one else who could do this work, they had a captive market and charged accordingly.

" page 5 question 5 it was explained, when I joined A WB in 2000, by the IGB thai the UN

recognised that Iraq had to pay for the Land transport in hard currency because they had to

buy new trucks and they had to pay forsign drivers. The UN recognised, due to sanctions.they

had no way of earning foreign currency to pay for the transportation of the grain other than via

the program, therefore, it was agreed by the UN and the Iraq's that the transport component would be included in ail future contracts.

Trust this is of assistance don't hesitate to call if you require any clarification.

Best regards

Charles Stott

General Manaper Rural Services

Landmark hflobiie Work

- * P e t er Hargreaves/HO/AWB wrote:

To; Charles Stott/HO/AWa@AWB

From: Peter Hargreaves/HQ/AWB

Date: 02/25/2005 01.44PIUI

Subject: Fw: Project Rose - further version of position papei

Th^e fourth dot point addressed the question recorded in the position paper as to whether AWB knew that the Government of Iraq was a majority shareholder in Alia

Mr Stoh denied that he always assumed that Alia was part owned by the Iraqi government, and said his choice of words was poor.s^ That evidence was false The contents of the first paragraph of his email and the repeated use of the word 'always'

206

Report of the OU-for-Food Inquiry

poin t t o hi s knowin g a t al l time s afte r h e resume d employmen t i n mid-200 0 tha t th e Iraq i governmen t wa s a par t owne r o f Alia .

I t i s thu s clea r that , a t al l time s M r Stot t kne w o f fact s tha t indicate d that , throug h it s shareholdin g i n Alia , th e Iraq i governmen t stoo d t o benefi t fro m th e truckin g fees . I n addition , i t ca n hardl y b e sai d tha t M r Stot t wa s candi d wit h hi s inquir y i n

circumstance s wher e h e di d no t disclos e wha t h e kne w —a s recorde d i n thi s emai l — eithe r i n hi s writte n statemen t o r i n hi s ora l evidence .

Conclusio n

Fo r th e reason s given , M r Stot t di d no t engag e i n th e analysi s h e describe d i n hi s evidence .

Furthermore , hi s preparednes s t o giv e evidenc e tha t wa s fals e permit s a n inferenc e t o b e draw n tha t M r Stot t kne w tha t th e truckin g arrangements :

 ha d no t bee n approve d b y th e Unite d Nation s

 benefite d th e Iraqi s i n tha t monie s wer e remitte d t o them .

M r Stot t asserte d that , afte r h e ha d see n th e IGB' s writte n confirmation's , ^ G J-qI^ I M r Goodacr e tha t h e ha d receive d th e documentar y evidenc e tha t h e ha d requeste d t o sho w tha t th e Unite d Nation s ha d bee n advise d o f th e increas e i n th e inlan d transportatio n fees.'' ^ M r Goodacr e denie d bein g tol d tha t b y M r S t o t t . M r Stott' s unsupporte d evidenc e tha t h e tol d M r Goodacr e abou t th e impositio n o f th e 1 0 pe r cen t mus t b e rejected . M r Stot t i s a witnes s o f suc h poo r credi t tha t hi s evidenc e canno t b e accepte d i n th e absenc e o f corroboration .

Repor t of the Oil-for-Food Incjuiry 2 0 7

Note s

1 E x 198 , WST.0001.013 7 a t 0144 , para . 28 . 2 E x 198 , WST.0001.013 7 a t 0144 , para . 28 . H e sai d h e als o spok e t o M r Liste r an d M r Hughes . 3 T 2262.30-32 . 4 T 2262.38-47 . 5 T 2264.23-25 . 6 T 2264.47 . 7 T 2265.4-6 . « T 2534.23-25 . y T 2534.26-31 .

1 " T 2288.47- T 2289.3 . 1 1 T2289.9-n . 1 2 T 2289.37-42 . T 2290.30-31 .

n T 2290.31-34 . 1 5 E x 77 , WST.0004.0003 ; E x 198 , WST.0001.013 7 a t 0145 , para . 30 . I f E x 77 , WST.0004.0003 . 1 7 E x 650 , AWB.0002.0200 .

I S T 2296.35-39 ; E x 198 , WST.0001.013 7 a t 0145 , para . 30 . '«T2290.39- T 2291.35 . 2 0 T 2292.31-40 . 2 1 E x 158 , AWB.0146.0206 . 2 2 T 2292.44-45 . 2 3 T 2293.47- T 2294.2 . 2 4 T 2293.6-28 . 2 5 T 2293.12 . 2f t T2585.38- T 2587.1 .

2 7 T 2655.23-34 . 2 8 T 6136.4-42 . 2' ' S o muc h i s mad e apparen t fro m th e examinatio n o f M r Tuoh y b y M r Stott' s ow n counse l ( T 6128.38- T 6129.7) :

Q : I f 1 ca n tak e yo u t o th e ver y las t sentenc e [E x 69C, AWB.0182.010 6 a t 0110] , i t reads : 'Ou r revie w focuse d o n identifyin g an y integrit y risk s tha t ma y b e relevan t t o AW B personne l and , i n particular , t o th e thre e identifie d above. ' A : Yes .

Q : Now , i s th e reaso n fo r thos e comment s an d th e structur e o f th e repor t tha t th e revie w an d th e focu s o f th e revie w wa s o n individuals ? A : That' s correct .

Q : Yo u wer e no t asked , fo r example , t o loo k a t whethe r ther e ha d bee n a breac h o f U N sanctions ? A : No t specifically , no. ' Se e Chapte r 20 . 3 1 Se e Chapte r 20 . 3 2 Se e Chapte r 20 . 3 3 E x 159 , AWB.0106.0107_ R a t 0108_R ; Se e als o Chapte r 20 . 3 4 E x 299 , AWB.5010.0009 , M r Watson' s emai l t o M r Hoga n an d on-sen t t o M r Stott , whic h said : 'Truckin g compan y ha s als o confirme d the y hav e receive d lOOpc t truckin g fee s an d hav e pai d

IGB' .

2 0 8 Report of the Oil-for-Food liiqiiiri /

3 5 T 2614.2-34 . 3 6 E x 1329 , AWB.9000.019 5 a t 0196 , AWB.0468.000 5 a t 0006 , M r Quennell' s note s o f hi s intervie w wit h M r Stott . 3 7 T 2263.27 . 3 8 E x 381 , AWB.0084.0046_ R a t 0049_R . 3 9 T 2263.29-37 . 4 0 T 2263.39- T 2264.7 .

4 1 E x 1337 , AWB.9001.021 2 a t 0218 . M r Stot t di d no t adop t th e statemen t a s representin g hi s posiho n ( T 7513.16) . 4 2 E x 198 , WST.0001.0137-0147 . 4 3 E x 198 , WST.0001.013 7 a t 0145 , para . 30 . 4 4 E x 198 , WST.0001.0137-0147 .

4 5 E x 142 , WST.0005.000 1 a t 0027 , para . 91 ; T 2048.5-12 . 4 6 E x 158 , AWB.0146.0206 . 4 7 E x 167 , AWB.0141.0477 . 4 8 T 2583.23-47 .

4 9 T 2586.01-04 . 5 0 T 2586.19-20 . 5 1 T2586.45- T 2587.1 . 5 2 T 2589.37 . 5 3 M r Stot t sai d tha t bot h AW B an d th e 1 G B sough t approva l fro m th e Unite d Nations . Thi s i s inconsisten t wit h th e documentar y evidence , whic h show s tha t approva l wa s sough t h y th e selle r submittin g application s wit h AW B shor t for m an d IG B lon g for m contracts . Se e Chapte r 11 .

5 4 E x 1329 , AWB.9000.0195-0197 , AWB.0468.0005-0007 . 5 5 E x 1337 , AWB.9001.0212-0222 . 5 6 E x 1356 , AWB.9005.0274_R ; E x 1357 , AWB.9005.0363-0368 . 5 7 T 7520.8-26 . 5 8 T 2663.29 . 5 9 T 2663.40 .

6 0 T 3350.42-46 ; T 3358.30-45 ; T 3391.47- T 3392.6 .

Report of the Oil-for-Food Incjuiry 2 0 9

Ap p en d i x 1 9 Ira q u p d a tes , Octob e r 2 00 0

Figur e 19. 1 'Ira q updat e Octobe r 2000 ' tha t accompanie d M r Stott' s emai l o f 2 2 Octobe r 200 0

Ira q Updat e Octobe r 200 0

Progres s t o date :

- Th e backlo g o f vessel s waitin g t o discharg e Um m Qas r ha s bee n cleared .

< - Th e shippin g progra m i s bein g carefull y manage d an d a s resul t demurrag e t)ill s hav e reduce d substantially , ^ I n Jul y o n averag e eac h vesse l spen t aroun d 44day s a t discharg e port , toda y vessel s ar e spendin g approximatel y 20days .

Demurrage , shortag e claims , financin g an d technica l assistanc e cx)st s ar e bein g factore d int o th e contrac t price .

Ongoin g issues :

< - Notwithstanding , tha t AW B i s no w bein g paid . vi a a highe r contrac t price , fo r contractua l difficulties , AW B continue s t o wor k wit h th e IG B i n orde r t o improv e ih e contractua l performance ,

- - Th e discharg e rat e a t U M M Qas r i s stil l belo w expectations . Actua l discharg e rat e i s onl y aroun d 10.00 0 tonne s pe r da y agains t a 20,00 0 tonne s undertakin g provide d b y th e ministe r i n July , Bert h N o 3 ha s switche d fro m grai n t o stee l an d containe r unloadin g (thi s i s supposedl y a temporar y arrangement) , r Shipmen t o f ethe r origi n grai n l o Um m Qas r wil l ad d t o th e complexit y o f managin g th e

foni/ar d program .

< - Eve n wit h carefu l managemen t o f th e shippin g progra m vessel s continu e t o incu r demurrag e cause d b y 3- 4 da y quali y testin g an d 5-da y fumigatb n tim e i f Insect s ar e found .

Solutions :

< - Visite d Baghda d Oct.200 0 an d hel d discussion s wit h th e Grai n Boar d o f Ira q an d Iraq i Ministe r o f Supply , Th e purpos e o f th e missio n wa s t o explor e mechanism s fo r improvin g contractua l performanc e including :

1 . Discharg e perfomiance , 2 , Paymen t procedures . .1 , Fina l weigh t an d quality .

. 1 U n procedure s

Testing ;

Qualit y testin g take s thre e day s afte r berthing , IG B wil l no t tes t a t th e pilo t statio n du e th e 9 hour s

i t take s t o trave l t o th e vessel .

IG B woul d no t accep t testin g i n Australi a a s al l whea t mus t b e teste d i n Iraq .

I t ma y b e possibl e t o utiliz e a fre e bert h (suga r berth ) t o conduc t testin g whils t vesse l wait s fo r a grai n berth .

Fumigations :

A003 1

AWB.5009.037 4

Repor t of the Oil-for-Food Incjuiry 211

V e s s e l s ar e n o w bein g fumigate d (a s required ) a t t h e berth . I f onl y a fiatc h i s infeste d tfie y wil l f u m i g a t e thi s hatc h whils t d i s c h a r g e c o m m e n c e s o n t h e o t h e r hatches .

T r u c k i n g :

A W B ' s s h i p p i n g agent s reporte d tha t d i s c h a r g e ha d b e e n r e d u c e d d u e t o a lacl ( o f trucks . T h e ministe r a n d I G B refut e tha t i s a shortag e o f trucks .

G u a r a n t e e d D i s c h a r g e Rate :

,AW B i s worliin g wit h th e Ministe r t o improv e th e d i s c h a r g e rat e a t th e por t o f U m m Qaser , wit h a v i e w t o o b t a i n i n g a g u a r a n t e e d d i s c h a r g e rat e t o 3 0 0 0 tpd .

P a y m e n t P r o c e d u r e s :

A W B re-presente d t o I G B a c o p y o f s p r e a d s h e e t tha t highlighte d th e d e l a y i n p a y m e n t s f r o m th e Gomptetio n o f d i s c h a r g e t o th e recelva l o f payment .

U N P r o c e d u r e s :

A W B highlighte d t o th e Ministe r t h e inefficien t p r o c e d u r e s fo r t h e a p p r o v a l o f contract s a n d t h e e s t a b l i s h m e n t o f L/C's , U n d e r t h e U N regulation s a p p r o v a l i s mean t t o o c c u r withi n 4 8 hour s however , A W B ' s las t contrac t tool < 8 w e e k s fo r a p p r o v a l a n d th e L/ C t o b e established .

W e i g h t a n d Quality ;

A W B r e q u e s t e d tha t thi s conditio n b e c h a n g e d t o fina l w e i g h t a t loa d port , I G B woul d no t accep t

thi s c h a n g e citin g U N rule s an d regulations -P h a s e 9 :

Ira q wil l b e increasin g t h e truckin g fe e t o U S D 3 5 , 0 0 f o r s h i p m e n t s t o U m m Q a s r a n d 5 % o f contrac t pric e fo r othe r ports .

P h a s e 9 negotiation s wil l t a k e plac e i n lat e D e c e m b e r o r earl y J a n u a r y .

M e s s a g e f r o m Minister :

T h e Ministe r r e q u e s t e d tha t A W B pas s o n a m e s s a g e f r o m th e Iraq i G o v e r n m e n t t o th e Australia n g o v e r n m e n t , highlightin g thei r c o n c e r n a t th e a b s e n c e o f officia l d i a l o g u e b e t w e e n t h e t w o countries , i n ligh t o f t h e a m o u n t o f trad e c o n c l u d e d wit h Australia , A W B i s Iraq' s s" ' larges t

importe r

A lette r ha s b e e n sen t unde r Trevo r F l ü g g e signatur e t o Ministe r o f Trade , M a r k Vaile ,

AWB.5009.037 5

Source : E x 1001 , AWB.5009.0374 .

212 Report of the Oil-for-Food liiqiiiri /

Figur e 1 9. 2 'Ira q updat e Octobe r 2000 ' tha t accompanie d M r Stott' s emai l o f 2 3 Octobe r 200 0

A002 2

Ira q Updat e Octobe r 200 0

Progres s t o date ;

' Th e backlo g o f vessel s waitin g t o discharg e U m m Qas r ha s bee n cleare d Th e shippin g progra m i s bein g carefull y manage d an d a s resul t demurrag e bill s hav e reduce d substantially ,

^ I n Jul y o n averag e eac h vesse l spen t aroun d 44day s a t discharg e port , toda y vessel s ar e spendin g approximatel y 20days .

^ Demurrage , shortag e claims , financin g an d technica l assistanc e cost s ar e bein g factore d int o th e contrac t price .

Ongoin g issues ;

^ Notwithstanding , tha t A W B i s no w bein g paid , vi a a highe r contrac t price , fo r contractua l difficulties , A W B continue s t o wor k wit h th e I G B i n orde r t o improv e th e contractua l performance .

^ Th e discharg e rat e a t UM M Qas r i s stil l belo w expectation s Actua l discharg e rat e i s onl y aroun d 10.00 0 tonne s pe r da y agains t a 20.00 0 tonne s undertakin g provide d b y th e ministe r I n July , ^ Bert h N o 3 ha s switche d fro m grai n t o stee l an d containe r unloadin g (thi s i s supposedl y a

temporar y arrangement) , ^ Shipmen t o f othe r origi n grai n t o U m m Qas r wil l ad d t o th e complexit y o f managin g th e forwar d progra m ^ Eve n wit h carefu l managemen t o f th e shippin g progra m vessel s continu e t o incu r demurrag e

cause d b y 3- 4 da y qualit y testin g an d 5-da y fumigatio n tim e i f insect s ar e found -

Actions :

Visite d Baghda d 0ct,200 0 an d hel d discussion s wit h Grai n Boar d o f Ira q an d Iraq i Ministe r o f Supply . Th e purpos e o f th e missio n wa s t o explor e mechanism s fo r Improvin g contractua l performanc e including ;

Discharg e perfomiance , A W B i s workin g wit h th e Ministe r t o improv e th e discharg e rat e wit h a vie w t o obtainin g a guarantee d discharg e rat e o f 300 0 tpd . Th e solutio n identifie d wil l nee d t o b e discusse d wil h DFA T t o ensur e tha i i t i s acceptabl e t o th e UN , Subjec t t o i t bein g acceptabl e i t i s expecte d lha l Ira q wil l the n loo k t o implemen t measure s l o reduc e th e amoun t o f lim e vessel s spen d a l discharg e port .

Paymen t procedures , A W B table d fo r discussio n t h e inefficien t U N procedure s fo r approva l o f contracts , establishmen t o f L/C' s an d paymen t delays . I t wa s agree d tha t th e I G B an d A W B woul d rais e th e issu e wit h th e UN , Weigh t an d quality , Almos t ever y vesse l dischargin g a t U m m Qas r suffer s a shortag e claim , i n a n attemp t l o avoi d futur e claim s A W B attempte d t o chang e th e contrac t t o weigh t an d qualit y final a t loa d port , I G B woul d no t accep t thi s chang e citin g U N rule s an d regulations . W e wil l

continu e t o pursu e thi s amendment .

Messag e fro m Minister , Th e Ministe r requeste d tha t A W B pas s o n a messag e fro m th e Iraq i Governmen t t o th e Australia n govemment . highlightin g thei r concer n a t th e absenc e o f officia l dialogu e betwee n th e tw o countrie s Australi a i s Iraq' s larges t whea l supplier . A lette r ha s bee n sen t unde r Trevo r Flügg e signatur e t o Ministe r o t Trade , Mar k Vaile .

AWB.5001 .01 0 2

Source : E x 1 004 , AWB.5001 .01 02 .

Report of the Oil-for-Food hiquiry 2 1 3

Appendix 20 Correspondence between

AWB Limited and DFAT,

October and November

2000

Figure 20.1 Mr Hogan's first draft of AWB's facsimile to DFAT, 27 October 2000

i

illllllilillH AWB.0106.0107

AWB L I M I T ED FacEimilB 03 B670 2762

AWB LIMITEP ^ICNOai B90459 Ceras House 526 LDnsdBle Slieel Melbourne Wc 3000

SPO Boi 4562 "ielbouine Mc 3001 Ajsiralia Telephone

+613 9209 2000 Facsimie

To Name: | Jill Coutney

Company; DFAT

Fa*: 02 B261 2640

Name: | Jill Coutney

Company; DFAT

Fa*: 02 B261 2640

Name: | Jill Coutney

Company; DFAT

Fa*: 02 B261 2640

From Name; | Dominic Hogan

Direct Fax: +613 9670 5539

Direct Telephone: +613 9209 203S

Email dfioo3n0ai´b.com.au

Name; | Dominic Hogan

Direct Fax: +613 9670 5539

Direct Telephone: +613 9209 203S

Email dfioo3n0ai´b.com.au

Name; | Dominic Hogan

Direct Fax: +613 9670 5539

Direct Telephone: +613 9209 203S

Email dfioo3n0ai´b.com.au

Name; | Dominic Hogan

Direct Fax: +613 9670 5539

Direct Telephone: +613 9209 203S

Email dfioo3n0ai´b.com.au

No. ol pages: tot 2 1 Date: 27"' October 2000

Subject: traq (tixcharge

15 you have rwl received bD pages plHse cofilact Ihi wnder. This tacsimto te strictly conWential and inlenaed BolBjy lor the namad addressat. tf you have [Bceivw) this document in enor dJmm rxjtlfv 1´ irynediatety and flestrl^v this copy.

Dear Jill,

The Australian Grains Marketer

Report of the Oil-for-Food Incjuiry 215

AWB,0106,0108

(

7)

<

AWB has been experiencing substantial delays in Ihe discharge of wheat vessels al the port of Umn) Qaser, Iraq.

Consequently, an AWB delegation recently visited Iraq to determine ihe caijse of this problem. It was discovered that the discharge rate was affected by the availability of road iranspDrts, and to increase the discharge rate, more transports would be required,

CurremJy all Iraq contracts are concluded as "Free In Tnick" all govennates Iraq, with a predetermined and UN approved transpon fee. The inclusion of the transport fee in the contract reduces AWB's ability to negotiate rates directly with the iransport company, and subsequently there is no performance incentive for Ihe transport company to maximise the discharge rates at Umm Qaser,

AWB are extremely keen to rectify Ihe discharge problems a! Umm Qaser. AWB will commence discussions directly with the transport company in Jordan with an ajm of introducing a perfomiance incentive scheme. This eloquent solution will reward the transpon company based up the final discharge pcrfonnance of each vessel.

Prior to commencing our discussions with the Jordanian transport company, would appreciate any feedback from DFATregardmg the above-mentioned proposal.

Best regards,

Dominic Hogan Regional Manager Middle East

The Australian Grains Marketer

Source: Ex 159, AWB.0106.¤107.

216

Report of the Oil-for-Food Inquiri/

Figure 20.2 The second draft of AWB's facsimile to DFAT, 30 October 2000

lilMii'il AWB,0173,0261

Æ AWB L I M I T ED Facsimjle 03 8670 2782 AWB UMFTED ACN OBI 890 459 CereE House 52B Lonsdale Street Melbourne Wc 3000 GPO Box 4562 Melbourne VlC 3001 Ajslralia Teleptione ^613 92092000 Facsimile ciirBTni; To i3S Name: 1 Jill Coulney Company: DFAT Fax: 02 6261 2640 From fJame: Charles Stott Direct Fax: +613 S670 6539 Direct Telephone: +613 S209 2035 Email cs1otl@awb.com.au No. Of pages: 1 ot 1 Dale: 30"i Oclober 2000 Subject: Iraq - Contract Execution Issues. II you riave not reesivacf ali peges please contea the tender. This tacsirtilte is stridly confidenlial and intended solely toj the named addressea. If you heue received this document In error please np% us °mmacjislely and destroy ihrs copy Dear Jill. CONFIDENTIAL The Australian Grains Marketer Report of the Oil-for-Food Incjuiry 217

Ililllllifil AWB 0173 0262

As you are aware, AWB is experiencing problems managing its' Iraq business efficienily. Tlic firsi problem concerns Uniied Nations procedural issues, which we will document in a separate nme

The second issue is the physical execution problem resulting in delays of vessels discharging ai Umm Qaser, Iraq- As a consequence of ihesc delays, AWB is incurring significant demurrage costs.

We urgently need to rectify the problem which our delegation identified is caused by the lack of trucks al discharge port.

Fo.- your guidance, Jordsn based trucking coirpanies are responsible for arranging trucks at discharge port We propose entering into discussions wilh these mjcking companies with a view lo agreeing a commercial anrÓngement in order to ensure that there are enough trucks lo enable the prompt discharge of Australian wheat cargoes.

While we believe the proposed solution will eloquently solve our problem, the purpose of writing i.': lo ensure lhal DFAT is corafoitablt with AWB proceeding with the suggesied approach.

Thanks in anticipation.

Best regaitis.

Charles Stott General Manager International Marketing

The Australian Grains Marketer

Source: Ex 297, AWB.0173.0261.

218 Report of the Oil-for-Food liiqiiiri/

Figure 20.3 The final version of AWB's facsimile to DFAT, 30 October 2000

i ax ssnx BtJ " EJi.

ran fi-on : tl 3 96703539 30-'irKee 15.-59 Fs: 1

I:´illilj| AWB.0106.0111

L I M I T ED

Njwne: Ji|l Coulnsy

To Company; DFAT

F4*: 02 8261 2fl40

Maine: ChSflu Slotl

From Otrecl FSA: " en 8970 5439

Oirett Telephone; " "613S209 2035

Email

,4

No. of page´: 1 oM | Dalª: 30^ October 2P0&

fiubjoct: l/sq - Cont^scl Isiues.

AVVt3 UMUED ^NDBIfi&O 45B

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(/ yeu niYi no( rteiVeO en pfl(fs´ pfease ciWacI the ª´ndª'. Th(e fecilmJ^v b ªrrk<1y corirMgntiel miindc} coi'tiy I'or the ngmtdjaciV´fl IMª tfocumani In ªrr´rf pJana ncftlty m t-wmerfalely fif^d flgªlro y IMs cqpy. ^

C O f ^ M E R C l AL IN C O i ^ F I D E N CE

Deaf Jill,

The porpoie of "writing b lo ensure "hat DTAT is comrorriblo wilh A Wt procoociing -ªviih xJic approach outlined be low, A* prowoysly discusicd \vc a re cgrrcinly cj^pcricncin^ jirciblcnif; nianapjn^; Our Iraq bitsincss, The tlrsi problem coiiccnis UIlill;dN;^.liof^s procedural l.ssui";.s, ivc will doctimcnl in a sttparate note.

Tlte sccond i&suc is, vessels dischai-jjing at l/nim Qasr suffer long dcJays and as n consctjucncc AWD incurs subsunua! dcmurifl^e bills. Our rcccm mission idintifl´! tUai tin? ilovv dis'itva^gc of vciScli li c "l^u^*cd by ª lack of toicVj at discha^^c porl.

For your gifid^nit´, Jord.Mib,-wtd trucking tompftnies are rcsfonsibh fOi" arrar>gin| truck,t at diachorgc pQil. To recCjiy the problem, we propose cnlcni^g into diicussions -ªvilli the Jordai) iruckins conipa3:)ic5 with a view to ngresiii^ a coimuefciii] ijrran^cmcnl °n crJcf lo cniwrc ih^l lhac ore tnoiigh trucks tc CnftHIc iSc prompi dischar^ic of Auslra1iat> wheal cai^gocs.

V/tf b&Iievo tJje propo5´4 scªluTion wili doqyCrtily iolvt our problem aiid lock forv^^rd to receiving yoiirrciporvsc-

Tli^nk you in aiiticipatiort

B´I rc^jJirds-,

CJiarlrsSloli CencfBl Mpn^giJ* Inlerjiniiounl Mnrheting

The Australian Grains Marketer

Report of the Oil-for-Food Incjuiry 219

Figure 20.4 DFAT's reply dated 2 November 2000 to AWB's facsimile of 30 October 2000

\

2 Novembe 2000

Chirles Slolt

General Manager, Inlemational Marketuij AWB LimitaJ

Cer´ House ;28 Lonsdale St Melbounie Victoria

" AFFAIRS AND

THADE

South Paiiiic, Aftica Mil Middle Huat Divisiun

AWB.0002.0200

C O M M E R r i A l, TN C O P m P E N CE

Dear Mi Stª´,

Thank you fhr your commiuication outlining the Riimner in whicb you propoM to procced to deai with problems you have ercOTintered in discharging vessels of your ivheat rapons lo Iraq at Umm Qair port. As you have explained In us the delays in discharge v/ere earning you to incur substantjal demumge costa and afTeding the viability of your iride.

Wc uwterttand that, or your rucoit visit lo Baghdsd. yon identified the source nf the problem u being a lack of tnicks at the discharge point. Theª trucks are supplÏ´^ by Jordan-bued eompnnie´. Voii therefore prepose m enter into discuiiinns with the Jotdtm trucking companies with a view to igtedig to a commcreial urranganait in order to ensure Ihii there are enough trucks available lo enable the pnMnpt dÃ9eh,irEe of Australian wheat cargoes when they anive.

We have wamined, at your requwi, ihii propuseJ c-ourse of ntiion .inrf eim soc no nauion ftoro aa intcnulional legal perspectivo why yK>\x should not pmcccd. Tbst is, this wotild not contravene (he curnmt sanctions regime on Iraq.

Iiitonatkinal Legal Division lias been canmlted in

T trust this in of assistane´ to yvni

Yours tir

preparation of

TdMW. UJO T-Xd,

ilUL^

: Drake-Brockman jTssistont Secretaiy. Middle iijut and Afnca Branch

RC. Caiey Biujdint Bstlon ACf 0221 wiªw.dfaLfov.´u TeitplM!";: 5J.62Ã III ! 1

12-R

Source: Ex 650, AWB.0002.0200.

Report of the Oil-for-Food Incjuiry

221

Appendix 21 Extracts of notes of

Mr Snowball and Mr Hogan

Figure 21.1 Mr Snowball's note of his conversation with Ms Moules, 26 March 2001

2o/og I S M; oznsie^i AWB cm GROl'P

Exhibit 391 Tendered 21/2/06

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Report of the Oil-for-Food Incjuiry 223

Figure 21.2 Mr Hogan's note made during his trip to Iraq in May 2001

6.014

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Source: Ex 181, AWB.0185.0529.

2 24 Report of the OU-for-Food Inqu ini

Appendix 22 Correspondence between

Mr Lindberg, Prime Minister Howard and Mr Saleh, July

2002

Figure 22.1 Letter from IVIr Lindberg to Mr Howard, 1 July 2002

AWB L I M I T ED Andrew Lindberg Chief Execiiiiw : Ju;y 2002

The Hon John Howard MP

Prime Minislsr PsrJiament House Canberra ACT 25CC

D)

mmmum DFT.0005.0113

DÈar Prime Minister

Australian wheat exports to Iraq

As you may be aware, AWB Limited has a long-standing and successful relationship with Iraq which has developed over many decades. Iraq is an extremely imporlant market to ihe relurns of Australian wheat growers wilh snnual sales of oround 2.5 fniilion lonnes, or approximately 15

percent of the total Australian wheat export program. In 20QO-'01 marketing year Iraq was Ihe largest export deslinalion for Ausiralian wheal which enjoyed also 90 percent market share. These sales are carried oat under ihe (Jniled NalJOns' Oil for Food program and play a significanl humanitarian role in feeding the wider Iraqi population.

Relations wilh (his market have, h1 times, been quite difficull and AWB Limiled, in dealing wilh the Iraqis has always attempted to draw a clear distinction between the trade and political relalionsh^p. Iraq has, on numerous occasions over the years, requested AWB Limited lo make representolions lo the Auslralian Governmenl regarding its altitude to Iraq which we have duly undertaken. We have always apprecialed your Government's comprehensive response lo those representalions and the commitment to reinforcing the importance of the Irade relationship with Iraq, particularly as il reÌales to wheat exports.

As part of our ongoing relationship wilh this markel, AWB represenlalives met with His Excellency. Mohammed Medi Saleh. Minister of Trade. Republic oÌ Iraq, in Baghdad las! week. It was our expectation that we wou'd conci¸ds a 1 million tonne contract for provision of wheat Ihrough lo December. However, AWB Limited's representatives were advised by the Minister that, due to ihe "aggressive policy attitude" oÌ the Australian Government towards Iraq, he could no longer justify the significant purchase cf Australian wheal,

Consequently, the Minister informed us that Iraq had reduced their requirements of Australian wheal by 50 percen: to sn atbcation of 500.000 tonnes. The Minister indicated that without 3 cliange in attitude towards Iraq, theiÈ woLiIrl bs a sigrkiHcanl shift in Ihe trsdirj .'-^irtiicr^chip for wheal placing any future sales in jeopardy.

The Minister staled that the Auslralian Government should view the wheal trading relationship between Australia and fraq as a privileged one and should nol take ihe market for granted, He indicated that he was under intense pressure lo cease purchases of Australian wheat but that he would put the outstanding 500.000 lonnes "In reserve" pending a positive outcome from AWB's representations. Specifically, the Minister soughL

o an explanation form the Auslralian Government as to why they have publicly supported the current US administration; o a clarification of the Australian Governmenl's attitude towards Iraq; and ‹ d ¸tÌrri¸iiSLiati¸ii ul a leai lyn¸enuy t¸ tioi lake aUhon against Iraq,

A^VR LIMITFD AC (iHl nm .t-'i

( L-rr>- Hini^cr 'iJK t tinsd.ili' Sla-t'L Mi.'llifnifiu'Vit UKKJ Cil'O Eliiv Mt'lhiKirnc Vic UIOI AunI,,

li-lriilii.jH'il I 'Jj[i'J JlKlil Liv sinuli-{J< 'H,()J M 5Õ, ^vuv^ .i>>1).ciiin.:u:

Report of the Oil-for-Food Incjuiry 225

u lililll'lilWIH DFT.0005.0114

Unlike previous difficullies wilh the Iraq trade relationship, we noie that the concerns raised by the Minister during Ihis recen! visi', and the requested actions, ere extremely specific and focused which, we believe, represenis a signjficanl escalation in their position. AWB Limited Is extremely concerned lhal if this silualicn is left unchecked, then it is likely to seriously sffec! our wheat trade to this imporlanl market. Even Ihe current Ihreat of a reduction of hai' a million lonnes wjII pul significant price pressure on grower returns and wilJ polenliall/ decrease the National Pool rolurn for APW. AWB Limiled's benchmark grade, by as much AS5.8Q a tonne.

AWB Linnited fully appreciates your Government's position with regard to Iraq end understands the very s&nsilive issues surrouriding relations with this country, particularly in the current political environmenl. We are keen, however, lo work with your Government to explore what actions can L>e laker; which clo ÏÏo' corripromise llie broader oolitical and trsde rigenda of the Australian Govertiititinl but which safeguard ihe ionger term iradiog interests of Ausirgtian wnoat growers in this ma/ket.

In this conlexi, we are working closely with the offices of the fvlinister for Trade and the Minister for Agriculture, Fisheries and Forestry lo examine how we can progress this issue and seek; to ensure sales of Australian wheat continue under the United Nations' arrangements in accordance with UN resolutions.

Should you or any members oi your office have any queries regarding this issue, please do noi hesitate to contact either myself or fvlr Matthew Foran, Government Relations Manager, on 03 9209 2063.

Yours sincerely

An"^e w-Uadbei^ Managing Director

226

Report of the OU-for-Food Inquiry

Figure 22.2^ Letter from Mr Howard to Mr Lindberg, 27 July 2002

rc '..^.j'.

WST.Ooo2.oi, 7

Mr Andrew LiflSbtr^^ Managing Director AWB Lifted

GPOBcii 4562 MELBOURNE VIC 300J

Dcaj- ivi) Linilherg

PRiMt MiNISTtR

CflNBEBRA

?7 JUL

Thaiik you for your letter of 1 July 2002 about Australian wheat exports to Iraq.

I fuUy share AWB Limitcd's concerns at comments made by (he Iraqi Trade Miiuster, His Excellency Mohamined Mehdi SaJeh, to AWB representatives in June regarding Iraqi purchases of Australian wheal. Australia ha.^ been a reliable and competitive supplier of wheat to Iraq, despite Iraq's intematioual problems. This trade relationship has been beneficial for the It^qi people,

I am advised that you wrote or. 2 July to Mr Saleh. in consultation with staff from Che offices of Mr Vaile and Mr Truss and my office, outlining Australian Bovernment policy towards Iraq and tn'inc lo clarify the siiuatioii. li is of cowse pleasing to see reference in the media to Mr Saleh welcoming the content of your letter. But the govermpent is disturbed to also see reports that he may at the same time have reiterated the threat to halve Australian imports and even foreshadowed further action. We are currently seeking clarification from the Iraqi authorities.

As you will appreciate, the goyemmrnt cannot ´ccepi any L^sqi attempt tc politicise our wheat trade or to pressure us into di'opping our support for UN Security Council resolutions requinng tnteraational inspection of Iraq's WMD facilities. In view of the importance of this matter. I suggest the govemroenl and AWB Liraitsd remain in close contact in order thai we can jointly attenipt to achieve a satisfactory outcome in the longer term.

Thank, yoti for wnling to me on this important matter.

s sincerely

C.lohn Howard)

Report of the OU-for-Food Inquiry

227

Figure 22.3 Letter from Mr Lindberg to Mr Saleh, 2 July 2002

AWB L t M r T E D

2 July 2002

Andrew Llndbfrg Chief £iectªir.e

"A\m m im DFT.00¤5.0117

His Excellency Wohgmmed Mehdi Saleh Minister for Traae Republic of Iraq

Dear Minister

AWB Linnited is very proud of its long association with the people of Iraq and the privileged position we have built up over mary decadcs as Iraq's preferred supplier of wheat. This relationship is one of our strongest and rnost enduring and has conlinued and developed even through difficult periods. As y˚u would be aware, AWB Limited has giways sought lo supply the people of fraq vi/ilh a high quality product and has been extremely innovative in working with your people to ensure continued supply.

As pan of this on-going relationship. Mr Michael Long. AWB Limited's General Manager -International SaÓes and Marketing, only last week visited Baghdad and had the great pleasure of meeting wilh you at this time. Mr Long has informed me Ihat we have successfully concluded a contract for 500.000 tonnes of Australian wheat for delivery through to October thfS year. We are gratcfuJ S˚r the Jong-standing trade we h8ve built up with Iraq and for the opportunity to conduct this latest business.

However, I also understand from Mr Long you have expressed your serious concerns al what the Government of Iraq beJieves is the aggressive policy attitude of the Australian Government towards Iraq. As a consequence of this, you informed him you could no longer justify the significant purchase of Auslralian wheal and would be reducing your requirements by 50 percenL

I believe, however, that you have indicated Ihat you will put the outstanding 500,000 tonnes "in res en/e' pending a positive outcome from representations by AWB Limited lo our Governmenl, I understand from Mr Long that, without a change In attitude towards Iraq by the Australian Governmenl, there would be a significant shift in the trading relationship for wheal placing any future sii'es in jeopardy.

AWB Limiled has always greatly appreciated your personal support for our organisation and our supply of Australian wheat to Iraq. I want to assure you AWB Limited takes your concerns with Ihe utmost seriousness and has already laken Immediate steps lo try and remedy the situation. I

do want to note, however, that AWB Limited is a publicly listed company owned and conlrolted by Ihe wheal farmers of Australia and enjoys no special privilege or association with the Australian Government. As a commercial trading operation, in our'dealings around the world we have always attempted to draw a clear distinction between the trade and political relationship. The only actions we can take are making representglions {o our Gcvernment informing Ihem of your serious cor^cerns and to impress upon them the importance of the Iraqi market to the Australian

wheat industry and the strong relationship we have with your country over many years.

As you may already be aware, upon hearing your concerns, AWB Limited made immediate

representations lo the Australian Governmenl, bolh at our Embassy in Jordan and back here in Australia. I have personally written to Ihe Prime Minister bringing lo his attention the issues you

AWB LIMITED ACKOÕH 000-13^

Ceres Ho'.ise52G L¸os¸j Ic Sireel Melbourne Vic 3D00 GPO Bo\ 45&2 Mel'DOLiTr^r Vic 3Q0I Austuiliii

Tt'lephunC' O.'Ó ^3209 2000 fiicÁimilc 03 9602 www.awb.cotn.au

2 28 Report of the Oil-for-Food liiqiiiri/

Mlililllillllllill DFT.0005.011B

have raised and the serious impact this would have on wheat trade between our two countries. A copy of this correspondence is attached for your informatiori,

Further, having returned from his visit to Baghdad, Mr Long travelled to Canberra on 27 June with our Government Relations Manager to make personal representations to the offices of the Prime Minister, Ministers for Trade and Agriculture and their respective Departmants. You may also be aware Mr Long met with Mr Abdal Salam A. Ali, AttachÈ to the Embassy of Ihe Republic of Iraq, to reinforce AWB Limiled's relationship with Iraq and our commitmeni to trying to rectify the current situation.

We understand lhal, iollowing our representations to the Australian GovernmenI, the Minister for Trade, Ihe Hon fvlark Vaile MP, instructed his Department to call up Mr Ali and present him with an aide-memoire outlining Ihe Government's position and reinforcing its strong commitment to the trade relationship between our two countries, I have taken Ihe liberty of also attaching a copy of this aide-memoire for your information. We are informed by our Governr^ient Itial, prior to issuing the aida-memoire. Minister Vaile personally raised this issue with the Prime Minister directly,

I aggira want to stress the importance that AWB Limited places on ils relationship with iraq and our long-standing trade arrangements, I am hopeful thai our actions over the past week will satisfy your concerns and that they have demonstrated that AWB Limited is doing everything in its powers as a commercial company to resolve the current situation. I am also hopeful that, as a result of this, we will be able to conclude the outstanding 500,000 tonne conlraci and thus continue Australia's proud tradition of supplying the People of Iraq with il wheal requirements.

I would greatly appreciate the opporiunity to visit Baghdad in the future and would be honoured st that lime to meet with you to further discuss the strong relationship between AWB Limited and Iraq. If you o; any members of your staff have any queries regarding this issue, please do not hesitate to contact either myself or Mr fvlichael Long on 613 9209 2045.

Yours sincere'/

drew Lindberg

ManagliT^ Dlfeutuj

Report of the Oil-for-Food Incjuiry 229

Appendix 23 Inland transportation fees,

1999 to 2003

Figure 23.1 Key changes to method of payment of inland transportation fees, 1999 to 2003

1999

2000

2001

2002

2003

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

July 1999: Inland transportation fees first levied on AWB contracts (at USS12 per tonnel

Nov 1999: Inland transportation fees first paid by AWB

Jul 2000: Mr Stott puts an end to the payment of inland transportation fees via Ronly and oltier shipov^ners

Nov 2000: Inland transport component of fee increased from USS14 pmt to US$25 per tonne Introduction of 10% after-sales-service fee. Total inland transportation fee rises to US$45,80 per tonne

May 2001: AWB starts paying inland transportation fees in Deutschmarks

Nov 2001: AWB starts paying inland transportation fees in euros

Nov 1999 to July 2000 AWB pays inland transportation fees both directly to Alia

and indirectly via Ronly and other shipowners

July 2000 to March 2003

AWB pays inland transportation fees directly to Alia

Mar 2003: Pearl of Fujairah inland transportation fees paid

Oct 2003: AWB concludes an Agency and Transport Services Agreement witti Ali a

Nov 1999 to May 2001

Inland

transportation fees paid by AWB in US dollars

May 2001 to Nov 2001

Inland

transportation fees paid in Deutschmarks

Nov 2001 to March 2003

Inland

transportation fees paid in euros

Nov 1999 to May 2001

Inland

transportation fees paid by AWB Chartering (who in turn obtain

reimbursement from AWB Pool)

May 2001 to March 2003

International Sales and Marketing Division of AWB responsible for

authorising payment of inland transportation fees which are now paid

by AWBI directly

Repwrt of the OU-for-Food Inquir}/ 231

hJ

w

N>

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a

O

Table 23.1 Inland transportation fees paid by AWB Limited, November 1999 to March 2003

Date of

payment Contract Payment Currency Amount

Division requesting payment Payment requested by

Payment authorised by Recipient of Payment DOG IO

25.11.99 A4653 90% USD US$453,600,00 AWBI Officer Laskie Alia AWB.0042.0009_R

Ex 1447

08.12.99 A4653 100% USD US$504,000,00 Chartering Gatto Watson Alia AWB.0042.0080_R

Ex 1447

09.12,99 A4653 100% USD US$581,664.00 Chartering Gatto Watson Euro-Asia AWB.0042.0233 R

Ex 1447

09.12.99 A4653 100% USD US$456,013.80 Chartering Gatto Watson Hyundai AWB.0042.0262_R

Ex 1447

09,12,99 A4653 100% USD US$621,000.00 Chartering Gatto Watson Euro-Asia AWB.0163.0016_R

Ex 1447

13.12.99 A4653 10% USD US$48,928.86 Chartering Gatto Watson Alia AWB.0042,0007_R

Ex 1447

15.12.99 A4653/A4654 100% USD US$500,400.00 Chartenng Gatto Watson Hyundai AWB.0042.0334 R

Ex 1447

20.12.99 A4654 100% USD US$579,012,00 Chartering Alien Watson Euro-Asia AWB,0043.0007_R

Ex 1448

03.03.00 A4654

A4655 A4906

90% USD US$3,454,692.01 Chartering Gatto Watson Alia AWB.0064.0011 R

Ex 1448

10.03.00 A4906

A4655 A4908

100% USD US$2,079,614.52 Chartering Gatto Watson Alia AWB.0087.0081_R

Ex 1449

31.03.00 A4822

A4907 A4821 A4334

100% USD US$1,140,953.76 Chartering Gatto Watson Tse Yu Hong AWB.0046.0079_R

Ex 1451

31.03.00 A4822 100% USD US$1,456,308.00 Chartering Gatto Watson Tse Yu Hong AWB.0046.0035_R

Ex 1451

31.03.00 A4655 100% USD US$404,700.00 Chartering Gatto Watson Tse Yu Hong AWB.01 63.0122_R

Ex 1449

-i

o

?

o

W

W

u

Date of payment Contract Payment Currency Amount

Division requesting payment Payment requested by

Payment authorised by Recipient of Payment Doc ID

31.03.00 A4821 100% USD USS565,541.76 Chartering Gatto Watson Tse Yu Hong AWB,0045.0013 R

Ex 1458

31.03.00 A4907 100% USD US$575,412.00 Chartering Gatto Watson Tse Yu Hong AWB.0039.0098 R

Ex 1452

07.04.00 A4822

A4908

100% USD US$1,056,000.00 Chartering Allen Watson Tse Yu Hong AWB.0163.0125_R

Ex 1451

10.04.00 A4972 100% USD US$609,000.00 Chartering Cowan Hale Hyundai AWB.0052.0022^R

Ex 1455

17.04.00 A4972 100% USD US$612,001.80 Chartering Cowan Hale Hyundai AWB.0052.0119 R

Ex 1455

19.04.00 A4972 100% USD US$506,700.00 Chartering Alexander Hale Hyundai AWB.0052.0182 R

Ex 1455

26.04.00 A4972 100% USD US$630,098.85 Chartering Cowan Watson Hyundai AWB,0052.0307^R

Ex 1455

09.05.00 A4972 100% USD US$3,852,910.00 Chartering Cowan Watson Tse Yu Hong AWB.0052.025LR

Ex 1455

12.05.00 A4654

A4655

10% USD US$265,084.56 Chartering Gatto Watson Alia AWB.0163-0068 _R

Ex 1449

12.05.00 A4971 100% USD US$1,844,364.10 Chartering Cowan Watson Tse Yu Hong AWB 0051.0109_R

Ex 1454

16.05.00 A4971 100% USD US$613,500.00 Chartering Cowan Watson Hyundai AWB.0051.0047_R

Ex 1454

16.05.00 A4971 100% USD US$1,749,501.61 Chartering Cowan 1 Tse Yu Hong AWB,0163.0250_R

Ex 1454

17.05.00 A4653 100% USD US$458,293,87 Chartering Cowan Hale Hyundai AWB.0042.0241 R

Ex 1447

17.05.00 A4653

A4654

100% USD US$502,902.00 Chartering Cowan Hale Hyundai AWB.0042.G312^R

Ex 1447

19.05.00 A4971 100% USD US$613,500.00 Chartering Cowan t Hyundai AWB.0051.0043 R

Ex 1454

19.05.00 A4971 100% USD US$2,151,998.55 Chartering Cowan 1 Tse Yu Hong AWB.0051.0157_R

Ex 1454

M

Ul

TS

O

o

I *I

-S

.3"

Date of

payment Contract Payment Currency Amount

Division requesting payment Payment requested by

Payment authorised by Recipient of Payment Doc ID

25.05.00 A4971 100% USD US$624,000.00 Chartering Cowan t Hyundai AWB.0051.0167_R

Ex 1454

25.05.00 A4971 100% USD US$1740,153.20 Chartering Cowan 1 Tse Yu Hong AWB.0051.0242.^R

Ex 1454

27.06.00 A4971 100% USD US$1,451,221.31 Chartering Allen Watson Tse Yu Hong AWB.0051.0250 R

Ex 1454

12.07.00 A4970 100% USD US$1,734,726.50 Chartering 2 Hale Tse Yu Hong AWB.0050.0010 R

Ex 1453

28.07.00 A4970 100% USD US$603,750.00 Chartering Cowan Watson Hyundai AWB.0050.0019^R

Ex 1453

03.08.00 A4970 100% USD US$611,460.00 Chartering Wall Hale Hyundai AWB.0050.0053 R

Ex 1453

07,08.00 A4970 100% USD US$795,240.00 Chartering Cowan Watson Alia AWB.0050.0097^R

Ex 1453

11.08.00 A4972 100% USD US$506,700.00 Chartering Allen Watson Hyundai AWB.0052.0152_R

Ex 1455

15.08.00 A4970 100% USD US$802,500.00 Chartering Cowan Watson Alia AWB.0050.0175 *R

Ex 1453

16.08.00 A4972 100% USD US$609,000.00 Chartering Allen Watson Hyundai AWB.0052.0003_R

Ex 1455

21.08.00 A4993 100% USD US$766,650.00 Chartering Cowan Watson Alia AWB.0053.0007^R

Ex 1456

28.08.00 A4970 100% USD US$618,120.00 Chartering Cowan Watson Alia AWB.0050.0191_R

Ex 1453

30.08.00 A4993 100% USD US$7B3,918.15 Chartering Cowan Watson Alia AWB.0053.0046_R

Ex 1456

04.09.00 A4993 100% USD US$789,740.55 Chartering Cowan Watson Alia AWB,0053.0094_R

Ex 1456

05.09.00 A4970 100% USD US$570,000.00 Chartering Cowan Watson Hyundai AWB.0050.0217_R

Ex 1453

10.09.00 A0101 100% USD US$576,450.00 Chartering Cowan Watson Alia AWB.0164.0050 R

Ex 1458

0

1

-S

NJ W

UI

Date of

payment Contract Payment Currency Amount

Division requesting payment Payment requested by

Payment authorised by Recipient of Payment Doc ID

21-09,00 A0062 100% USD US$763,350.00 Ctiartering Cowan Collis Alia AWB.0080,0012_R

Ex 1457

02,10,00 A0101 100% USD US$723,000,00 Ctiartering Cowan Watson Alia AWB.0081,0013 R

Ex 1458

05,10,00 A4970 100% USD US$611,460.00 Ctiartering Cowan Watson Hyundai AWB.0050,0050 R

Ex 1453

05,10,00 A4971 100% USD US$624,000.00 Ctiartenng Cowan Watson Hyundai AWB.0051,0159^R

Ex 1454

06,10.00 A4972 100% USD US$630,098.85 ctiartering Cowan Watson Hyundai AWB.0052,0285_R

Ex 1455

0610-00 A4970 100% USD US$603,750.00 Ctiartering Cowan Watson Hyundai AWB,0050,0015_R

Ex 1453

17,01.01 A4971 100% USD US$613,500.00 Chartering Cowan 1 Hyundai AWB,0051,0029_R

Ex 1454

18,01.01 A4972 100% USD US$612,001.80 Chartering Cowan 1 Hyundai AWB,0052,0087_R

Ex 1455

09,03,01 A0267 100% USD US$330,195,90 2 1 Alia AWB,0164,0147_R

Ex 1461

02,05,01 A0430 1st

1st 1st 1st 1st

1st 1st 1st

DM DM10,054,797,45 ISM-Midd!e East

Desk

stott Scales

Goodacre

Alia AWB,0001,0366 R

Ex 1462

24,05,01 A0553 100% DM DM2,077,381,26 ISM-Middle East

Desk

Hogan Ingleby

Goodacre

Alia AWB,0009,0103 R

Ex 1464

01,06,01 A0430 2nd DM DM1,257,128,13 ISM-Middle East

Desk

Hogan Scales

Ingleby

Alia AW6,0079,0105 R

Ex 1462

04,06.01 A0553

A0552

1st 1st 1st 1st

DM DM5,727,451,05 ISM-Middle East

Desk

Hogan Ingleby

3

Alia AWB,0079,0104 R

Ex 1464

w

Ul

Ci

-3

O

Q

"5

"5'

Date of

payment Contract Payment Currency Amount

Division requesting payment Payment requested by

Payment authorised by Recipient of Payment Doc ID

13.06.01 A0552

A0430

1st 1st 2nd 2nd

DM DM9,265,955.10 ISM *Middle East

Desk

Hogan Ingleby

Scales

Alia AWB.0079.0107^R

Ex 1462

26.06.01 A0430 2nd

2nd

DM DM5,676,824.19 ISM-Middle East

Desk

Hogan Stott

Goodacre

Alia AWB.0006.0246 R

Ex 1462

26.06.01 A0552

A0553

1st 1st 1st 1st

DM DM5,579,208.51 ISM *Middle East

Desk

Hogan Stott

Goodacre

Alta AWB.0079.0109_R

Ex 1463

03.07.01 A0553 1st DM DM1,058,613.47 ISM *Middle East

Desk

Hogan Stott

Goodacre

Alia AWB.0010.0063_R

Ex 1464

12.07.01 A0430

A0553

2nd DM DM9,834,500.56 ISM-Middle East

Desk

Ednnonds-Wilson Stott Ingleby Alia AWB.0009.0105_R

Ex 1464

18.07.01 A0552 2nd DM DM2,811,616.24 ISM *Middle East

Desk

Hogan Stott

Ingleby

Alia AWB.0079.0118_R

Ex 1463

23.07.01 A0553 2nd DM DM3,261,492.70 ISM-Middle East

Desk

Hogan Stott

Goodacre

Alia AWB.0009.0151_R

Ex 1464

07.08.01 A0552 2nd DM DM2,865,724.21 ISM-Middle East

Desk

Hogan Stott

Ingleby

Alia AWB.0079.0122 R

Ex 1463

13.08.01 A0552 2nd DM DM3,254,742.00 ISM-Mlddle East

Desk

Hogan Goodacre

Scales

Alia AWB.0079.0125_R

Ex 1463

13.08.01 A0430 2nd DM DM3,237,429.94 ISM-Middle East

Desk

Hogan Ingleby

Goodacre

Alia AWB.0006.0324_R

Ex 1462

15.08,01 A0553 2nd DM DM3,509.624.03 ISM-Mlddle East

Desk

Hogan Stott

Goodacre

Alia AWB.0079.0127 R

Ex 1464

23.08.01 A0552 1st OM OM5,530,025.55 ISM-Middle East

Desk

Hogan Goodacre

Stott

Alia AWB.0079.0130^R

Ex 1463

23.08.01 A0552 2nd DM DM3,523,149.05 ISM-Middle East

Desk

Hogan Goodacre

Stott

Alia AWB.0079.0129^R

Ex 1463

27.09.01 A0553 1st DM DM3,001.982.89 ISM-Middle East

Desk

Hogan Long

Goodacre

Alia AWB.0079.0132^R

Ex 1464

ª

o

Date of

payment Contract Payment Currency Amount

Division requesting payment Payment requested by

Payment authorised by Recipient of Payment Doc ID

09.10.01 A0552

A0553 A0553

1st 1st 2nd

DM DM5,996,359.46 ISM-Middle East

Desk

Edmonds-Wilson Long Ingleby Alia AWB,0162,0193_R

Ex 1464

12.10.01 A0553 2nd DM DM3,491,062.13 ISM-Middle East

Desk

Hogan Long

Goodacre

Alia AWB.0162,0205 R

Ex 1464

23.10.01 A0553 1st DM DM1,360,855.76 ISM-Middle East

Desk

Hogan Long

Ingleby

Alia AWB,0079,0142_R

Ex 1464

24.10.01 A0552 2nd DM DM2,739,717.92 ISM-Middle East

Desk

Hogan Long

Ingleby

Alia AWB.0079.0134_R

Ex 1463

30.10.01 A0552 2nd DM DM3,195,596.11 ISM-Middle East

Desk

Hogan Long

Goodacre

Alia AWB.0079.0144 R

Ex 1463

31.10.01 A0784 100% ¨URO ¨2,708,847.00 ISM-Middle East

Desk

Hogan Geary

Ingleby

Alia AWB.0079,0004 R

Ex 1465

02.11.01 A0553 2nd DM DM3,200,215.65 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Ingleby

Alia AWB.0079,0146_R

Ex 1464

09.11.01 A0552 2nd DM DM2,738,949.11 ISM-Middle East

Desk

Hogan Long

Goodacre

Alia AWB.0079,0136_R

Ex 1463

12.11.01 A0552 2nd DM DM3,620,921.24 ISM-Middle East

Desk

Hogan Long

Scales

Alia AWB.0162.0097_R

Ex 1463

12.11.01 A0784 100% Euro ¨2,797,107.90 ISM-Middle East

Desk

Hogan Long

Scales

Alia AWB,0161.0008_R

Ex 1465

13.11,01 A0784

A0552

100% 2nd

Euro ¨4,480,596.52 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Goodacre

Alia AWB.0C79.0007_R

Ex 1463

16,11,01 A0552 2nd Euro ¨1,368,721.10 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Goodacre

Alia AWB,0079.0009_R

Ex 1463

29,11,01 A0784 100% Euro ¨2,656,987.20 ISM *Middle East

Desk

Edmonds-Wilson Harvey Goodacre Alia AWB,0161,0018 R

Ex 1465

07,12,01 A0553 2nd Euro ¨1,740,634.91 ISM-Middle East

Desk

Edmonds-Wilson Long Ingleby Alia AWB,0079,0013 R

Ex 1464

10,12,01 A0784

A0785

100% Euro ¨5,039,784,75 ISM-Middle East

Desk

Hogan/Edmonds-Wllson

Long Ingleby

Alia AWB,0013,0178 R

Ex 1465

IO

u

"si

M

U

00

o

O

. t

n

s

Date of

payment Contract Payment Currency Amount

Division requesting payment Payment requested by

Payment authorised by Recipient of Payment Doc ID

14.12.01 A0784

A0785

100% Euro ¨2,668,835.68 ISM-Middle East

Desl<

Hogan/Edmonds-Wilson

Long Scales

Alia AWB.0079.0017 R

Ex 1466

14.12.01 A0553 2nd Euro ¨1,404,378.36 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Scales

Alia AWB.0079.0018 R

Ex 1464

21.12.01 A0553 2nd Euro ¨1,764,328.57 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Goodacre

Alia AWB.0079.0037_R

Ex 1464

28.12.01 A0785 100% Euro ¨2,878,196.20 ISM-Middle East

Desk

Edmonds-Wilson Johnson Davey Alia AWB.0079.0039 R

Ex 1466

28.12.01 A0552 2nd Euro ¨1,782,047.85 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Alia AWB.0079.0041_R

Ex 1463

02.01.02 A0553 2nd Euro ¨1,585,999.10 ISM-Mlddle East

Desk

Hogan/Edmonds-Wtlson

Long Alia AWB.0079.0043 R

Ex 1464

09.01.02 A0785 100% Euro ¨2, 847,560.00 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Roberts

Alia AWB.OOI3.0394 R

Ex 1466

11.01.02 A0784 100% Euro ¨2.084,046.75 ISM-Middle East

Desk

Hogan/Edmonds-Wilsor

Long Roberts

Alia AWB.0079.0048 R

Ex 1465

29.01.02 A0784

A0785

100% Euro ¨5,554,150.31 ISM-Middle East

Desk

Hogan Harvey

Scales

Alia AWB.0079.0050_R

Ex 1466

08.02.02 A0785 100% Euro ¨2,891,326.00 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Roberts

Alia AWB.OOI 3.0336 R

Ex 1466

12.02.02 A0785 100% Euro ¨7,822,092.20 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Johnson

Alia AWB.OOI 3.0539_R

Ex 1466

18.02.02 A0785

A0784

100% Euro ¨4,423,260.00 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Scales Geary

Alia AWB.0079.0054 R

Ex 1466

01.03.02 A0784

A0784 A0785

100% Euro ¨5,599,078.06 ISM-Middle East

Desk

Edmonds-Wilson Long Scales

Alia AWB.0001.0368^R

Ex 1466

28.03.02 A0784

A0785 A1112

100% Euro ¨7,700,743.08 ISM-Mlddle East

Desk

Hogan/Edmonds-Wilson

Geary Ingleby

Alia AWB.0013.0104_R

Ex 1466

17.04.02 A im

A1112

100% Euro ¨4,620,258.48 ISM-Mlddle East

Desk

Hogan/Edmonds-Wilson

Long Roberts

Alia AWB.0079.0022_R

Ex 1467

>3

o

o

NJ W

VD

Date of

payment Contract Payment Currency Amount

Division requesting payment Payment requested by

Payment authorised by Recipient of Payment Doc ID

29.04.02 A1112 100% Euro ¨2,825,400.00 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Ingleby

Alia AWB,0014.0376 R

Ex 1468

14.05.02 A1112 100% Euro ¨2,786,563,49 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Ingleby

Alia AWB,0079,0063_R

Ex 1468

22.05.02 A1112

A l i li

100% Euro ¨5,220,121,61 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Scales

Alia AWB,0079,0065_R

Ex 1467

07.06.02 A1111 100% Euro ¨8,443,128,21 ISM-Middle East

Desk

Hogan/ Edmonds-Wilson Long Alia AWB,0079,0027_R

Ex 1467

17.06.02 A l i li 100% Euro ¨5,103,562,09 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Ingleby

Alia AWB,0015,0217_R

Ex 1467

01.07.02 A1112 100% Euro ¨2,731,626,08 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

1 Alia AWB,0079,0031_R

Ex 1468

30.08.02 A l i li 100% Euro ¨2,867,827,63 ISM-Middle East

Desk

Hogan/ Edmonds-Wilson Long Geary

Alia AWB,0015.0342_R

Ex 1467

18.09.02 A l i li 100% Euro ¨5,539,629,63 ISM-Middle East

Desk

Hogan/ Edmonds-Wilson Long Geary

Alia AWB,0016,0074_R

Ex 1467

11.10,02 A1112

A l i li

100% Euro ¨5,352,979,38 ISM-Middle East

Desk

Whitweli/ Edmonds-Wilson Long Ingleby

Aha AWB,0016,0204_R

Ex 1467

25.10,02 A1112 100% Euro ¨2,880,800,00 ISM-Middle East

Desk

Hogan/ Edmonds-Wilson Long 3

Alia AWB,0017,0446_R

Ex 1468

06.11,02 A1112

A l i li

100% Euro ¨4,983,246,53 ISM Middle East

Desk

Hogan/ Edmonds-Wilson Long Scales

Alia AWB,0016,0288_R

Ex 1467

11.11.02 A1112 100% Euro ¨2,908,500,00 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Scales

Alia AWB,0017,0582 R

Ex 1467

28.11.02 A1441 100% Euro ¨2,426,000,00 ISM-Middle East

Desk

Whitweli/ Edmonds-Wilson Long Johnson

Alia AWB,0018,0056_R

Ex 1444

18.12,02 A1441 100% Euro ¨4,395,912,00 ISM-Middle East

Desk

Hogan/Edmonds-Wilson

Long Geary

Alia AWB,0018,0083 R

Ex 1444

13.01,03 A1441 100% Euro ¨2,547,300.00 ISM-Middle East

Desk

Hogan/ Edmonds-Wilson Long O'Shannassy

Alia AWB,0018,0231_R

Ex 1444

15,01,03 A1441 100% Euro ¨2,500,963.40 ISM-Middle East

Desk

Hogan/ Edmonds-Wilson Long O'Shannassy

Alia AWB,0018,0317^R

Ex 1444

o

Date of

payment Contract Payment Currency Amount

Division requesting payment Payment requested by

Payment authorised by Recipient of Payment DocID

30.01,03

24.02.03

14.03.03

A1441

A1441

A1441

100% Euro ¨2,037,840.00 ISM-IWiddle East

Desk

Hogan/Edmonds-Wilson

Geary 3

Alia AWB.0079.0091_R

Ex 1444

100% Euro ¨2,037,840.00 ISM-Middle East

Desk

Edmonds-Wilson/ Whitwell Long Geary

Alia AWB.0079.0093_R

Ex 1444

100% Euro ¨2,468,235.80 ISM-Middle East

Desk

Edmonds-Wilson/ Whitwell Long Owen

Alia AWB.0018.0059_R

Ex 1444

a

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2. It is

3. It is

g

' s-

o

Appendix 24 Analysis of Alia's bank

statements

Deutschmark account, 9 May to 21 June 2001

Exhibit 948 contains an extract from documents that were produced by Alia for Transportation and General Trade (Alia) to the United Nations Independent Inquiry Committee (IIC) in the course of Its investigations and which the United Nations in

turn produced to this Inquiry.

Tab C of Exhibit 948 contains a bundle of bank statements extracted from those documents. This bundle includes IIC'ARC-100612, which is page 7417 of a Deutschmark account that was maintained in the name of 'Alia for Transportation and General Trade Co.' with the Jordan National Bank, covering the period from 9 May 2001 to 21 June 2001.

Tab D of Exhibit 948 contains a translation^ of the bank statements behind tab C, including a translation of page IIC-ARC-100612 (page 7417),

There are four deposits recorded on page IIC-ARC-100612 (page 7417). Each is for a significant amount. They are listed in Table 24.1.

Table 24.1 Deposits recorded on page IIC-ARC-100612 (page 7417 of Alia's Deutschmark account)

Date of deposit Amount deposited

9 May 2001 DM10,054,785.450

6 June 2001 DM2,077,349.260

10 June 2001 DM6,984,567.180

24 June 2001 DM9,265,943.100

For the reasons identified more fully below, each of these four deposits recorded in Alia's bank statement appears to be the deposit of funds paid by AWB to Alia for inland transportation fees, including the additional 10 per cent after-sales-service fee, payable in respect of wheat shipped by AWB to Iraq under contracts concluded under the Oil-for-Food Programme,

Moreover, there also appear on this bank statement following the earlier deposits, the transfer of funds from this account to the credit of the account of the General Maritime Transportation Company with the Rafidain Bank. This reference to the General

Report of the Oil-for-Food Incjuiry 241

Maritim e Transportatio n Compan y i n th e translatio n o f thi s ban k statemen t woul d appea r t o b e a referenc e t o th e ISCWT , t o whos e accoun t wit h th e 'Raffadi n Ban k i n Jordan ' Ali a remitte d th e fund s tha t i t receive d b y wa y o f inlan d transportatio n fees. -

Eac h o f thes e transfer s recorde d i n th e ban k statemen t o f Ali a i s expresse d t o b e i n relatio n t o a particula r name d vessel . Al l o f th e vessel s name d i n thes e entrie s o n thi s pag e wer e vessel s chartere d b y AW B fo r th e carriag e o f whea t i n bul k t o Ira q unde r

AWB' s contract s fo r th e sal e o f whea t unde r th e Oil-for-Foo d Programme . Document s produce d b y AW B t o thi s Inquir y confir m tha t inlan d transportatio n fee s wer e pai d b y AW B t o Ali a i n relatio n t o th e shipment s carriec i b y eac h o f th e vessel s name d i n th e entrie s fo r thes e transfer s appearin g o n thi s ban k statement .

Eac h o f th e transfer s t o th e credi t o f th e accoun t o f th e Genera l Maritim e

Transportatio n Compan y wit h th e Rafidai n Ban k appea r t o b e th e remittanc e b y Ali a t o th e ISCW T o f th e inlan d transportatio n fee s payabl e i n respec t o f th e shipment s carrie d o n th e vessel s name d i n th e transfers , les s Alia' s commissio n o f 0.2 5 pe r cen t o f th e amoun t received .

A mor e detaile d discussio n o f eac h o f thes e deposit s an d th e transfer s tha t follo w i s containe d withi n th e followin g paragraph s o f thi s appendix .

Firs t deposit : DM10,054,785.45 0 o n 9 Ma y 200 1

The iief>osit into Alia's account

Thi s i s th e firs t entr y o n pag e lIC-ARC-10061 2 (pag e 7417 ) an d woul d appea r t o b e th e deposi t int o Alia' s Deutschmar k ban k accoun t o f DM10,054,797.4 5 whic h AW B pai d t o Ali a i n earl y Ma y 2001 .

Thi s represente d th e paymen t o f th e firs t instalment ^ o f th e inlan d transportatio n fees , includin g th e additiona l 1 0 pe r cen t after-sales-servic e fee s payabl e i n respec t o f 8 shipment s o f whea t i n bul k fro m Australia n t o Ira q whic h AW B mad e betwee n 1 5 Marc h an d 1 2 Apri l 200 1 unde r contrac t A0430. 4

Include d amongs t th e document s produce d b y AW B t o thi s Inquir y i s AWB' s reques t fo r paymen t o f thi s amoun t date d 2 6 Apri l 2001 . Thi s paymen t wa s requeste d b y M r Stott , authorise d b y M s Scale s an d M r Goodacr e an d checke d b y M r Alvare s fro m

th e Financ e Departmen t (a s t o th e bankin g details). ^

Thi s wa s th e firs t paymen t o f inlan d transportatio n fees :

 t o b e mad e i n a currenc y othe r tha n U S dollar s

 t o b e mad e wher e th e amoun t o f th e inlan d transportatio n fee s payabl e include d th e additiona l 1 0 pe r cen t after-sales-servic e fe e

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 t o b e mad e followin g th e chang e i n th e arrangement s fo r th e paymen t o f inlan d transportatio n fee s unde r whic h the y wer e n o longe r t o b e pai d b y AW B Charterin g an d wher e thei r paymen t wa s instea d t o b e arrange d throug h th e Internationa l Sale s an d Marketin g Divisio n o f AW B directly.' '

Thi s reques t fo r paymen t identifie s th e particula r vessel s (shipments ) i n respec t o f whic h paymen t wa s bein g mad e an d th e amoun t bein g pai d i n relatio n t o eac h vessel ' Thes e detail s ar e als o repeate d o n AWB' s schedul e o f inlan d transportatio n payment s mad e unde r contrac t A0430 ^ whic h als o confirm s tha t th e firs t instalmen t

o f th e inlan d transportatio n fee s payabl e i n respec t o f al l 8 shipment s unde r tha t contrac t wa s pai d b y wa y o f th e on e paymen t o f DM10,054,797.44 . Accordin g t o thi s schedul e thes e fund s wer e sai d t o b e remitte d t o Ali a o n 1 Ma y 2001. ^

O n 2 Ma y 2001 , AW B forwarde d b y facsimil e instruction s t o it s bank^ o t o transfe r thi s amoun t o f DM10,054,797.4 5 fro m it s Deutschmar k accoun t wit h th e ban k t o th e credi t o f Ali a an d it s ban k accoun t wit h th e Jorda n Nationa l Bank.' ^ Th e transfe r wa s t o b e mad e int o thi s accoun t vi a th e Jorda n Nationa l Bank' s corresponden t bank , Deutsch e Ban k i n Frankfurt.^ ^ Th e paymen t wa s transferre d int o thi s accoun t wit h th e Jorda n Nationa l B a n k " upo n th e instruction s o f Alia. "

AWB' s ban k statemen t fo r it s Deutschmar k accoun t record s th e paymen t o f thi s amoun t o f DM10,054,797.4 5 fro m AWB' s accoun t o n 2 Ma y 2001.^ 5

Ther e i s a sligh t differenc e (namel y DM12 ) betwee n th e amoun t pai d b y AWB^ ^ an d th e amoun t deposite d int o Alia' s account.^ ^ Thi s differenc e i s likel y t o b e th e resul t o f ban k fee s o r simila r ban k charge s havin g bee n deducte d fro m th e amoun t remitte d b y AW B b y eithe r th e recipien t ban k o r a n intermediar y bank.' ®

O n 3 Ma y 2001 , M r Edmonds-Wilso n sen t a facsimil e t o Ali a providin g confirmatio n o f tw o payment s tha t ha d bee n mad e t o Alia . Th e firs t wa s fo r cran e hir e i n th e su m o f US$29,400 . Th e secon d wa s th e paymen t o f DM10,054,797.4 5 whic h (accordin g t o thi s facsimile ) ha d bee n sen t o n 1 Ma y 2001.^ ^ Th e facsimil e confirme d tha t th e paymen t

wa s fo r inlan d transportatio n fee s an d liste d th e eigh t vessel s t o whic h tha t paymen t related . I t als o liste d th e amoun t bein g pai d fo r eac h vessel . Th e vessel s liste d an d th e amoun t payabl e i n respec t o f eac h o f thes e vessel s liste d i n thi s facsimile^ o ar e th e sam e a s th e vessel s an d correspondin g amount s liste d i n AWB' s reques t fo r payment .

O n 2 4 Ma y 2001 , M r Edmonds-Wilso n sen t a furthe r facsimil e t o Ali a onc e agai n advisin g tha t o n 1 Ma y 200 1 DM10,054,797.4 5 ha d bee n remitte d t o Alia' s Deutschmar k accoun t an d th e vessel s t o whic h tha t paymen t related2 2 (agai n consisten t wit h th e vessel s an d correspondin g amount s liste d i n AWB' s reques t fo r payment) .

Report of the O il -for-Food Incjuiry 2 4 3

The tiaiisfi"!' of tmiiis from this accoiiitt

Followin g thi s deposi t o n 9 Ma y 2001 , ther e i s recorde d o n pag e IIC-ARC-10061 2 (pag e 7417 ) o f th e ban k statement s fo r Alia' s Deutschmar k accoun t si x transfer s havin g bee n mad e fro m thi s accoun t t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k betwee n 1 0 Ma y 200 1 an d 2 7 Ma y 2001 . Th e tota l amoun t transferre d wa s DM7,686,346 .

The first tniiisfer

Th e firs t transfe r wa s mad e o n 1 0 Ma y 2001 . I t wa s fo r DM577,468 .

Th e entr y o n pag e IIC-ARC-10061 2 (pag e 7417 ) fo r thi s transfe r record s i t a s bein g i n relatio n t o a particula r vessel , th e nam e o f whic h i s recorde d i n tha t entry . Tha t i s th e sam e vesse l o n whic h th e firs t shipmen t unde r contrac t A043 0 wa s shippe d unde r a bil l o f ladin g date d 5 Marc h 2001 . I t i s als o th e firs t o f th e eigh t vessel s liste d i n AWB' s reques t fo r payment^ ^ an d facsimile s o f 3 Ma y an d 2 4 Ma y 2001.2 4

Th e amoun t pai d b y AW B t o Ali a i n respec t o f tha t vesse l wa s DM578,916.44 .2 5 Th e amoun t transferre d fro m Alia' s accoun t t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k i n respec t o f tha t vesse l wa s DM577,468.000.-' ' Thi s correspond s t o 99.7 5 pe r cen t o f th e amoun t receive d b y Ali a i n respec t o f tha t v e s s e l . ^ ^ T o pu t i t anothe r way , followin g thi s firs t transfe r t o th e accoun t o f th e Genera l Maritim e Transportatio n Company , Ali a retaine d DM1,448.4 4 i n it s Deutschmar k accoun t fro m th e fund s tha t i t ha d receive d i n relatio n t o thi s firs t vesse l (thi s bein g th e differenc e betwee n th e amoun t tha t i t receive d fro m AW B i n relatio n t o tha t vesseF » an d th e amoun t tha t i t transferre d t o th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k i n respec t o f tha t vessel-'^) . Th e amoun t retaine d (namel y DM1,448.44 ) represent s on e quarte r o f on e pe r cen t (o r 0.2 5 pe r cent ) o f th e amoun t tha t Ali a receive d fro m AW B i n relatio n t o thi s firs t vessel.^ " Thi s i s consisten t wit h M r Al-Absi' s evidence-^' ' tha t Ali a receive d (retained ) a commissio n o f 0.2 5 pe r cen t o f th e fee s tha t i t collecte d o n th e ISCWT' s behalf .

The sccoint transfer

Th e secon d transfe r o f fund s t o th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k wa s als o mad e o n 1 0 Ma y 2001 . I t wa s fo r

DM1,337,288.000 .

Th e entr y o n pag e llC-ARC-10061 2 (pag e 7417 ) fo r thi s secon d transfe r als o record s i t a s bein g i n relatio n t o a particula r vessel , th e nam e o f whic h i s recorde d i n tha t entry .

Thi s i s th e sam e vesse l whic h carrie d AWB' s secon d shipmen t o f whea t i n bul k t o Ira q unde r it s contrac t A043 0 wit h th e IGB . Thi s whea t wa s shippe d unde r a bil l o f ladin g date d 1 7 Marc h 2001.^ 2 I t i s als o th e secon d o f th e eigh t vessel s liste d i n AWB' s reques t fo r payment.-''' ^

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Th e amoun t pai d b y AW B t o Ali a i n respec t o f thi s secon d shipmen t (vessel ) wa s D M 1 , 3 4 0 , 6 4 0 . 0 0 . T h e amoun t transferre d fro m Alia' s accoun t t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k i n respec t o f thi s wa s DM1,337,288.000 .3 5 Thi s correspond s t o 99.7 5 pe r cen t o f th e amoun t receive d b y Ali a i n relatio n t o tha t secon d vesse l / shipment . O r t o pu t i t anothe r way , followin g thi s secon d transfe r t o th e accoun t o f Genera l Maritim e Transportatio n Compan y o n 1 0 Ma y 2001 , Ali a retaine d i n it s Deutschmar k accoun t DM3,35 2 (bein g th e differenc e betwee n th e amoun t tha t i t receive d fro m AW B i n relatio n t o thi s firs t vesseP^ ^ an d th e amoun t tha t i t transferre d t o tl^ e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k i n respec t o f tha t vesseP^ ) o r 0.2 5 pe r cen t o f th e inlan d transportatio n fee s tha t Ali a receive d fro m AW B i n relatio n t o thi s secon d shipmen t (consisten t wit h M r AI-Absi' s evidence^ » a s t o th e amoun t o f commissio n tha t wa s pai d t o Ali a i n respec t o f th e fee s tha t i t collecte d o n th e ISCWT' s behalf) .

Tliirc] to sixth transfer^

Simila r observation s t o th e foregoin g ca n b e mad e i n relatio n t o eac h o f th e third''^ , fourth^o , fifth-^ i an d sixth'^ 2 transfer s t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k appearin g o n pag e IIC-ARC -10061 2 an d mad e betwee n 1 5 an d 2 7 Ma y 2001 .

I n relatio n t o eac h o f thes e transfers :

th e entr y fo r eac h transfe r o n th e ban k statemen t record s th e transfe r a s bein g t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k

eac h entr y als o record s tha t th e transfe r i s i n relatio n t o a specifi c vessel , th e nam e o f whic h i s give n

eac h o f th e vessel s s o name d wa s a vesse l tha t wa s use d b y AW B t o carr y whea t t o Ira q a t tha t tim e

i n particula r eac h o f th e vessel s name d i n th e entrie s fo r thes e transfer s carrie d a shipmen t o f whea t t o Ira q unde r AW B contrac t A043 0

eac h o f th e vessel s name d i n th e entrie s fo r thes e thir d t o sixt h transfer s i s als o liste d o n AW B reques t fo r payment^ ^ fo r th e transfe r o f DM10,054,797.4 5 fro m AWB' s Deutschmar k accoun t t o Ali a o n accoun t o f th e inlan d transportatio n fee s payabl e b y AW B i n respec t o f th e shipment s carrie d b y thos e vessel s

th e amoun t recorde d o n pag e IIC-ARC-10061 2 a s havin g bee n transferre d t o th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k i n respec t o f eac h o f thes e name d vessel s i s 99.7 5 pe r cen t o f th e amoun t tha t Ali a receive d fro m AW B (a s par t o f th e paymen t o f DM10,054,797.45 ) i n respec t o f th e particula r vessel , consisten t wit h M r Al-Absi' s evidenc e o f Ali a receivin g (an d

Report of the Oil-for-Food Incjuiry 2 4 5

retaining) a commission of 0.25 per cent from the funds that it received on behalf of the ISCWT.

Scveiitli nini eighth trntisfers

There were two further transfers of funds from this account to the credit of the account of the General Maritime Transportation Company with Rafidain Bank on 7 June 2001. They were for DM1,004,022.00 and DM1,337,288 respectively.

Although these were made after further deposits into Alia's account on 31 May 2001 and 6 June 2001 respectively (which are discussed in more detail below), the documents produced to this Inquiry reveal that these transfers relate to the earlier deposit of 9 May 2001. In particular, these two entries are transfers from funds received by Alia in respect of the two remaining vessels listed on AWB's request for payment dated 26 April 2001.

The entry on page IIC-ARC-100612 for each of these seventh and eighth transfers records that the transfer was made in relation to a particular named vessel. The two vessels named in the entries for these two transfers were both vessels used by AWB to carry shipments of wheat from Australia to Iraq under its contract A0430, on 11 and 12 April respectively. Both vessels are also listed in AWB's payment request.'ts They are the last two vessels named.

The amount transferred from AUa's account in relation to each of these two vessels^^ is equal to 99.75 per cent of the amount that Alia received by AWB in relation to each of shipments of wheat to Iraq on these vessels.Similarly, the amount that Alia retained from the amount that it had received from AWB in respect of each vessel^Æ following these transfers was one quarter of one per cent (or 0.25 per cent) of the amount that Alia received from AWB in relation to each of these vessels.

Siiiniuan/

Page IIC-ARC-100612 (page 7417) of the bank statements for Alia's Deutschmark account with the National Bank of Jordan records that on 9 May 2001 Alia received DM10,054,785.45 into that account.

This entry would appear to record the deposit of DM10,054,797.45 which AWB instructed its bank to transfer from its Deutschmark account to the Deutschmark account of Alia with the Jordan National Bank on 2 May 2001. This transfer was the payment of the first instalment of the inland transportation fees payable in respect of

eight shipments which AWB made to Iraq between 5 March and 12 April 2001 under contract A0430.

Page IIC-ARC-100612 also records that between 10 May and 7 June 2001, there were eight transfers of funds by Alia from its Deutschmark account to the credit of the account of the General Maritime Transportation Company with Rafidain Bank. The

Report of the Oil-for-Footi Inquiri/ 246

entr y fo r eac h o f thes e transfer s record s th e transfe r a s bein g i n relatio n t o a specifi c name d vessel .

Th e eigh t vessel s identifie d a s bein g th e vessel s i n respec t o f whic h thes e eigh t transfer s wer e mad e t o th e credi t o f th e accoun t o f th e Genera l Maritim e

Transportatio n Compan y wit h th e Rafidai n Ban k wer e al l use d b y AW B fo r th e shipmen t o f whea t unde r it s contrac t A043 0 wit h th e 1GB . The y wer e als o th e sam e eigh t vessel s liste d i n AWB' s reques t fo r paymen t o f DM10,054,797.4 5 mad e o n 2 Ma y 2001 .

Moreover , th e amoun t tha t wa s transferre d b y Ali a t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h th e Rafidai n Ban k i n relatio n t o eac h o f thes e eigh t vessel s wa s a n amoun t tha t wa s 99.7 5 pe r cen t o f th e amoun t tha t Ali a ha d receive d fro m AW B i n relatio n t o eac h o f thos e vessel s {a s recorde d i n AWB' s reques t fo r payment) . Accordingly , followin g th e transfe r o f fund s fro m it s

Deutschmar k accoun t t o th e credi t o f th e accoun t o f th e Genera l Maritim e

Transportatio n Compan y wit h th e Rafidai n Ban k fo r eac h vessel . Ali a retaine d a n amoun t equa l t o approximatel y 0.2 5 pe r cen t (o r on e quarte r o f on e pe r cent ) o f th e amoun t tha t i t ha d originall y receive d fro m AW B i n respec t o f tha t vessel .

Secon d deposit : DM2,077,349.26 0 o n 6 Jun e 200 1

The deposit into Alia's account

Pag e lIC-ARC-0061 2 record s tha t o n 6 Jun e 200 1 ther e wa s a furthe r deposi t int o Alia' s Deutschmar k accoun t o f DM2,077,349.260.5 0

Thi s entr y woul d appea r t o refe r t o th e transfe r an d deposi t int o Alia' s Deutschmar k ban k accoun t o f DM2,077,361.2 6 whic h AW B pai d t o Ali a i n earl y Jun e 2001 . Thi s paymen t wa s th e firs t instalment^ i o f th e inlan d transportatio n fees^ ^ payabl e i n respec t o f 2 shipment s o f whea t i n bul k fro m Australia n t o Iraq . Bot h wer e shipment s mad e unde r AW B contrac t A0553 .

O n 1 7 Ma y 2001 , Ali a sen t tw o facsimile s t o AW B requestin g paymen t o f th e inlan d transportatio n fee s i n respec t o f bot h o f th e shipment s t o whic h th e abov e paymen t o f DM2,077,361.2 6 related.^-' ' I n bot h facsimile s fro m Alia , th e reques t fo r paymen t wa s

expresse d t o b e accordin g t o 'th e authorisatio n fro m th e Iraq i co . fo r wate r transpor t — Baghdad ' nos . 373 6 an d 373 7 bot h date d 1 2 Ma y 2001.5 4 got h facsimile s wer e als o accompanie d b y a facsimil e fro m th e 'Iraq i Ministr y o f Transpor t & Communication , Iraq i Stat e Co . fo r Wate r Transport ' addresse d t o Ali a an d heade d Tnlan d

Trasportati n Cos t fo r Privat e S e c t o r ' . ^ ^ Thes e facsimile s aske d Ali a t o coordinat e wit h AW B regardin g th e shipment s referre d t o i n eac h facsimil e an d t o 'arrang e t o pa y t o th e privat e secto r cos t o f inlan d transportation'.^ ^ Presumabl y thes e facsimile s fro m th e ISCW T ar e eithe r th e authorisation s referre d t o i n Alia' s facsimil e o r issue d pursuan t t o thos e authorisations . Ther e als o appeare d toward s th e en d o f bot h o f thes e facsimile s fro m th e ISCW T t o Ali a th e words :

Report of the Oil-for-Food Incjuiry 2 4 7

CC: MRS AWB LIMITED

KINDLY COORDINATE WITH 'MRS' ALIA AT A M M A N-

On 24 May 2001, Mr Edmonds-Wilson sent a facsimile to Alia^*^ confirming details of the payment of inland transportation fees that had been made on 1 May 2001 and relevantly for present purposes, advising that a payment of DM2,077,361.26 had been passed by AWB's finance department and should be remitted to Alia's account shortly. He then set out the details of that payment, recording the two vessels (and thereby shipments) to which it related, the bill of lading dates and the amount being paid in relation to each s h i p m e n t. ^^

Also included amongst the documents produced by AWB was a request for payment of DM2,077,361.26 dated 24 May 2001 (being the payment foreshadowed in

Mr Edmonds-Wilson's facsimile of that same date).^'^ The payment was requested by Mr Hogan. It was authorised by Mr Ingleby and Mr Goodacre. It also appears to have been signed by Mr Long for Charles Stott. This request for payment identified the two vessels in respect of which this payment related *being the same two vessels referred to in Mr Edmonds-Wilson's facsimile of 24 May 2001.The request for payment also identified the amount being paid in respect of the shipment on each vessel *again being the same amounts identified in Mr Edmonds-Wilson's facsimile of

24 May 2001.

On 30 May 2001, AWB (Treasury Operations) sent a facsimile to its bank^^ requesting transfer of DM2,077,361.26 from its Deutschmark account with the bank to the credit of Alia (with the Jordan National Bank).<^

A bank statement for AWB's Deutschmark account confirms the payment of

DM2,077,361.26 out of that account on 30 May 2001.

This payment of DM2,077,361.26 by AWB appears to have been funded from a deposit (in an identical amount) into AWB's Deutschmark account by AWB Finance Limited the same day on which the transfer was made. This deposit in turn appears to have been of Deutschmarks acquired by AWB as a result of a currency swap using US dollars. In other words, AWB swapped US dollars in order to acquire the

DM2,077,361.26 it needed to pay these inland transportation fees in Deutschmark as agreed with the IGB. This is consistent with the proposal outlined in an email from Mr Alvares to Mr Hogan dated 14 February 2001 as to how currency conversions would be treated in relation to payments made under this contract A0553.f'f'

Till' trnnsfcr of fiimls from this account

Following the deposit of DM2,077,349.26 on 6 June 2001, there are recorded on page IIC-ARC-100612 three transfers from Alia's Deutschmark account to the credit of the account of the General Maritime Transportation Company with Rafidain Bank between 7 and 10 June 2001.

Report of the Oil-for-Food Incjuiry 248

Th e firs t tw o transfers^ ^ hav e alread y bee n discusse d abov e i n th e contex t o f th e firs t deposi t recorde d o n pag e IIC-ARC-100612 , namel y th e deposi t o f 9 Ma y 2001 .

Th e thir d transfe r wa s fo r DM528,326.000 . I t wa s o n 1 0 Jun e 2001 . Th e vesse l name d i n th e entr y o n pag e IIC-ARC-10061 2 fo r thi s transfe r coincide s wit h th e firs t o f th e tw o vessel s liste d i n bot h AWB' s facsimil e o f 2 4 Ma y 2001'^ ® an d AWB' s reques t fo r paymen t o f DM2,077,361.2 6 als o date d 2 4 Ma y 2001 .

Moreover , th e amoun t tha t AW B pai d t o Ali a i n respec t o f tha t vesse l a s par t o f it s paymen t o f DM2,077,361.2 6 wa s D M 5 2 9 , 6 6 1 . 2 6 . T h e amoun t tha t wa s transferre d fro m Alia' s Deutschmar k accoun t i n relatio n t o tha t vesse l b y wa y o f thi s thir d transfe r wa s DM528,326.000 , whic h i s 99.7 5 pe r cen t o f th e amoun t tha t Ali a receive d fro m AW B i n respec t o f tha t vesse l an d it s shipment . Th e amoun t tha t Ali a retaine d fro m th e fund s tha t Ali a receive d fro m AW B i n respec t o f th e shipmen t o n thi s name d vesse l followin g thi s thir d transfe r wa s DM1,335.26 , whic h i s equa l t o 0.2 5 pe r cen t (o r on e quarte r o f on e pe r cent ) o f th e amoun t tha t Ali a receive d fro m AW B i n relatio n t o tha t shipment . Thi s i s agai n consisten t wit h M r Al-Absi' s evidenc e t o Ali a havin g bee n pai d a commissio n o f 0.2 5 pe r cen t o f th e inlan d transportaho n fee s tha t i t receive d fo r paymen t o n t o th e ISCWT." '

Ther e i s n o recor d o n pag e IIC-ARC-10061 2 o f th e transfe r t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k o f fund s i n relatio n t o th e secon d o f th e tw o vessel s t o whic h AWB' s paymen t o f DM2,077,349.2 6 r e l a t e s . x h a t vesse l complete d discharg e a t Um m Qas r o n 1 1 Jun e 2 0 0 1 . ^ ^

O n 2 8 Jun e 2001 , th e balanc e o f DM10,784,488.9 3 the n standin g i n thi s accoun t wa s transferre d fro m th e accoun t t o anothe r account . Th e translatio n o f th e entr y fo r tha t transfe r recorde d o n pag e IIC-ARC-10061 2 reads :

Y o u r m a r k a c c o u n t t o Eur o account .

Followin g thi s transfe r th e entr y i n th e colum n o f pag e IIC-ARC-10061 2 heade d 'Balanc e i n accoun t currency ' i s '0.000' . Thi s i s consisten t wit h th e transfe r o f al l o f th e fund s the n standin g t o th e balanc e o f tha t account .

I t therefor e appear s tha t th e whol e o f th e the n balanc e o f Alia' s Deutschmar k accoun t wa s thereb y transferre d t o it s eur o account .

I t i s no t possibl e t o sa y fro m thos e page s o f Alia' s ban k statement s tha t hav e bee n translate d b y thi s Inquir y whethe r an d whe n Ali a transferre d t o th e ISCW T tha t portio n o f th e inlan d transportatio n fee s pai d b y AW B t o Ali a i n respec t o f th e secon d shipmen t a s par t o f th e DM2,077,361.26 . Bu t i t ma y b e inferre d fro m th e othe r entrie s o n thi s ban k statement , a s discusse d above , tha t thos e fee s wer e transferre d b y Ali a t o ISCW T a t som e time .

Report of the Oil-for-Food Incjuiry 2 4 9

Siiiiiinnn/

Page IIC-ARC-100612 (page 7417) of the bank statements for Alia s Deutschmark account with the National Bank of Jordan records that on 6 June 2001 DM2,077,349.260 was deposited into that Deutschmark account.

This entry would appear to record the deposit of DM2,077,361.26 which AWB instructed its bank to transfer to Alia's Deutschmark account with the National Bank of Jordan on 1 June 2001, this being the first instalment of the inland transportation fees payable in respect of two shipments under AWB contract A0553.

Page IIC-ARC-100612 also records that on 10 June 2001, there was a transfer of DM528,326.000 from Alia's Deutschmark account to the credit of the account of the General Maritime Transportation Company with Rafidain Bank. The entry on page

IIC-ARC-100612 for this transfer identifies the vessel to which the payment relates. It is one of the two vessels whose shipments under contract A0553 were comprised in AWB's payment of DM2,077,361.26.

Furthermore, the amount that was transferred from Alia's Deutschmark account to the credit of the account of the General Maritime Transportation Company with Rafidain Bank in respect of the vessel named in the entry for that transfer appearing on page IIC-ARC-100612 (namely DM528,326.000) was 99.75 per cent of the amount that Alia

received from AWB (as part of the deposit of DM2,077,361.26) referable to that same vessel.

Equally, the amount that Alia retained from the funds it received from AWB in relation to that vessel following this transfer to the credit of the account of the General Maritime Transportation Company (namely DM1,335.26) was 0.25 per cent (or one

quarter of one per cent) of the amount of the inland transportation fees that it had received from AWB in relation to the shipment carried on that vessel.

Page IIC-ARC-100612 does not however record the transfer by Alia from its Deutschmark account of that portion of AWB's payment of DM2,077,361.26 which was referable to the second of the two vessels named in both Mr Edmonds-Wilson's facsimile of 24 May 2001 and AWB's request for payment.^^ y^e balance of that account was transferred to Alia's euro account before that transfer was or could be made.

Third deposit: DM6,984,567.180 on 10 June 2001

The deposit into Alia's account

Page IIC-ARC-00612 records that on 10 June 2001 there was a further deposit into

Alia's Deutschmark account of DM6,984,567.180.^^

This entry would appear to refer to the transfer and deposit into Alia's Deutschmark bank account of DM6,984,579.18 which AWB paid to Alia in early June 2001.

Report of the Oil-for-Food Incjuiry 250

This payment by AWB was made up of two amounts:

" the first was a payment of DM1,257,128.13 which represented the second instalment of the inland transportation fees^^ payable in respect of the first shipment that had been made by AWB under contract A0430"Æ

" the second payment was a payment of DM5,727,451.05 which represented the first instalment of inland transportation fees^^ payable in respect of four other shipments by AWB, two under contract A0552 and two under contract A0553.80

On 5 June 2001, AWB (Treasury Operations) sent a facsimile to AWB's bank

requesting transfer of DM6,984,579.18 from AWB's Deutschmark account to the credit of Alia's account with the Jordan National Bank.^'

On 4 June 2001, Mr Edmonds-Wilson sent a facsimile to Alia advising that

DM6,984,579.18 was being remitted to Alia and providing details of the 5 vessels (and thereby shipments) to which it related including the amount payable in respect of each vessel / shipment. ^^

The transfey offumis from this account

Following the deposit of this DM6,984,567.180 on 10 June 2001, there are recorded on page IIC-ARC-100612 five transfers from this account to the credit of the account of the General Maritime Transportation Company with Rafidain Bank between 12 and 24 June 2001.

The entry for each of these transfers is expressed to be in relation to a particular named vessel. Each of the vessels named were vessels that were employed by AWB for the carriage of wheat in bulk to Iraq at that time.

The first transfer

The first transfer of these transfers was made on 13 June 2001. It was for

DM1,253,985.000.

The vessel named in the entry for this transfer is the same vessel on which the first shipment under contract A0430 was shipped under a bill of lading dated

5 March 2001. It is also:

" the first of the five vessels listed on AWB's facsimile of 4 June 2001^3

" the same vessel as the vessel (and shipment) to which the payment request for DM1,257,128.13 relates.i^4

The transfer appears to be a transfer of funds paid by AWB by way of the second instalment of the inland transportation fees payable in respect of that shipment.

Report of the Oil-for-Food Inquirif 251

A s note d above , th e amoun t tha t Ali a wa s pai d b y AW B i n relatio n t o tha t vesse l (shipment ) wa s DM1,257,128.13.8 5 Th e amoun t tha t Ali a transferre d t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k i n respec t o f tha t vesse l (shipment ) wa s DM1,253,985.000.®' ' Thi s i s equa l t o 99.7 5 pe r cen t o f th e amoun t tha t Ali a receive d fro m AW B i n relatio n t o thi s vesse l (shipment) .

O f th e DM1,257,128.1 3 AW B pai d t o Ali a i n relatio n t o thi s vesse l (shipment) . Ali a retaine d DM3,143.1 3 (followin g th e transfe r o f DM1,253,985.00 0 t o th e Genera l Maritim e Transportatio n Company) . Thi s amoun t retaine d i s on e quarte r o f on e pe r cen t (0.2 5 pe r cent ) o f th e amoun t tha t AW B pai d t o Alia . Thi s i s consisten t wit h M r Al-Absi' s evidenc e a s t o th e amoun t (an d percentage ) o f th e commissio n tha t Ali a retaine d fro m th e money s tha t i t receive d o n behal f o f th e ISCWT.'^ "

Tlw remaining transfers

Th e remainin g transfer s o f fund s fro m thi s accoun t t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k recorde d o n pag e IIC -ARC-10061 2 were :

 th e transfe r o f DM1,235,064.00 0 o n 1 3 Jun e 200 1

 th e transfe r o f DM1,427,381.00 0 als o o n 1 3 Jun e 200 1

. th e transfe r o f DM1,514,764.00 0 o n 1 8 Jun e 200 1

 th e transfe r o f DM1,535,909.00 0 o n 2 4 Jun e 2001 .

Th e entr y o n pag e IIC-ARC-10061 2 fo r eac h o f thes e transfer s identifie s th e vesse l (shipment ) t o whic h th e transfe r relates . Th e fou r vessel s name d i n th e entrie s fo r thes e fou r transfer s wer e also :

 th e secon d throug h t o fift h vessel s liste d o n AWB' s facsimil e o f 4 Jun e 2001^^* ^

 th e fou r vessel s name d o n AWB' s reques t fo r paymen t a s th e vessel s an d thereb y shipment s t o whic h th e paymen t o f DM5,727,451.0 5 related .

Th e amoun t tha t i s recorde d o n pag e IIC-ARC-10061 2 a s havin g bee n transferre d fro m Alia' s accoun t b y wa y o f eac h o f thes e fou r transfer s i s th e equivalen t o f 99.7 5 pe r cen t o f th e amoun t tha t AW B pai d t o Ali a i n relatio n t o eac h o f thos e vessel s (shipments) , a s recorde d i n bot h it s facsimil e o f 4 Jun e 200 1 an d it s reques t fo r paymen t o f th e DM5,727,451.05.9 1

Summari!

Pag e IIC-ARC-10061 2 (pag e 7417 ) o f th e ban k statement s fo r Alia' s Deutschmar k accoun t wit h th e Nationa l Ban k o f Jorda n record s tha t o n 1 0 Jun e 2001 ,

DM6,984,567.18 0 wa s deposite d int o tha t account .

2 5 2 Report of the Oil-for-Food l i i qiiiri /

Thi s entr y woul d appea r t o recor d th e deposi t o f DM6,984,579.1 8 whic h AW B mad e t o Ali a o n 5 Jun e 2001 , bein g th e secon d instalmen t o f th e inlan d transportatio n fees'' ^ payabl e i n respec t o f th e firs t shipmen t unde r AW B contrac t A043 0 an d th e firs t instalmen t o f th e inlan d transportatio n fees^ ^ payabl e i n respec t o f fou r shipment s unde r contract s A055 2 an d A0553 .

Pag e IIC-ARC-10061 2 als o record s tha t followin g thi s deposit , ther e wer e fiv e transfer s fro m Alia' s Deutschmar k accoun t t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Bank . Th e entr y fo r eac h o f thes e transfer s identifie s th e vesse l (an d thereb y shipment ) t o whic h tha t transfe r related .

Fo r eac h transfer , th e vesse l (an d thereb y shipment ) nominate d i s on e i n respec t o f whic h th e paymen t o f DM6,984,579.1 8 wa s mad e b y AWB .

Furthermore , th e amoun t transferre d fro m Alia' s accoun t t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k b y wa y o f eac h o f thes e fiv e transfer s wa s 99.7 5 pe r cen t o f th e amoun t tha t Ali a receive d fro m AW B (a s par t o f th e paymen t o f DM6,984,579.18 ) referabl e t o th e vesse l name d i n th e entr y fo r tha t transfe r recorde d o n pag e IIC-ARC-100612 .

Fourt h deposit : DM9,265,943.10 0 o n 2 4 Jun e 200 1

The deposit into Alia's account

O n 2 4 Jun e 200 1 ther e wa s a furthe r deposi t int o Alia' s Deutschmar k accoun t o f

DM9,265,943.100.9 4

Thi s woul d appea r t o refe r t o th e transfe r an d deposi t int o Alia' s Deutschmar k ban k accoun t o f DM9,265,95 5 whic h AW B pai d t o Ali a i n mi d Jun e 2001 . Thi s paymen t wa s comprise d o f tw o amounts , namely :

 th e firs t instalmen t o f th e inlan d transportatio n fees^ ^ payabl e i n respec t o f tw o shipment s unde r AW B contrac t A055 2

 th e secon d instalmen t o f th e inlan d transportatio n fees''« ' payabl e i n respec t o f th e secon d an d thir d shipment s unde r AW B contrac t A0430.'' ^

Thi s paymen t o f DM9,265,95 5 t o Ali a wa s requeste d b y M r Hoga n an d authorise d b y M r Ingleb y an d M s Scales.'' ®

O n 1 9 Jun e 2001 , AW B (Treasur y Operations ) sen t a facsimil e t o AWB' s bank^ ^ requestin g th e transfe r o f DM9,265,955.1 0 t o th e credi t o f Alia' s Deutschmar k accoun t wit h th e Jorda n Nationa l Bank.^ ™

Th e Deutschmark s use d b y AW B t o mak e thi s paymen t wer e acquire d a s a resul t o f a foreig n currenc y exchang e swa p tha t AW B conclude d wit h it s bank'^ i o n 1 8 Jun e 200 1 pursuan t t o whic h AW B exchange d US$4,090,929.4 0 fo r th e DM9,265,955.1 0 require d t o pa y Alia .

Report of the Oil-for-Food Incjuiry 2 5 3

On 22 June 2001, Mr Edmonds-Wilson sent a facsimile to the IGB advising that AWB confirmed receipt of payment from the United Nations of the proceeds of the sale of the second and third shipments under contract A0430 and that the balance of the inland transportation fees payable in respect of those two shipments had been remitted to Alia on 19 June 2001. '"?

On 23 June 2001, Alia sent an email to Mr Edmonds-Wilson at AWB requesting:

Please sent us the details for tlie amount (9265943DIVI) ASAP in order to take the necessary

procedures.""

On 25 June 2001, Mr Edmonds-Wilson responded to Alia by email advising that the payment of DM9,265,955.10 made on 19 June 2001 was in respect of four shipments, and setting out the details of those shipments and the amount paid in respect of each.

The transfer of funds from this account

There are no transfers from Alia's Deutschmark account that appear to be referable to this deposit of DM9,265,943.100 on 24 June 2001 recorded on page IiC-ARC-10612 (page 7417) or the vessels (or shipments) to which that deposit related.

As has already been noted, on 28 June 2001 the balance of DM10,784,488.93 then standing in Alia's Deutschmark account with the National Bank of Jordan was transferred from the account to Alia's euro account. The entry for that transfer recorded in the bank statement (IIC-ARC-100612) is:

Your mark account to Euro account.

It is not possible to identify from the bank statements of Alia that have been translated whether the funds received by Alia as part of the deposit of DM9,265,943.100 on 24 June 2001 were remitted to the ISCWT and if so when and in what amounts.

Euro account, 3 April 2002 to 16 June 2002

Exhibit 948 contains an extract from documents that were produced by Alia for Transportation and General Trade Co. (Alia) to the United Nations Independent Inquiry Committee (IIC) in the course of its investigations and which the United Nations has in turn produced to this Inquiry.

Tab C of Ex 948 contains a bundle of bank statements extracted from those documents. This bundle includes pages 109571"-'' to 1096410^ inclusive of the bank statements for a euro account that was maintained in the name of 'Alia for Transportation and General Trade Co.' with the Jordan National Bank, covering the period from 3 April 2002 until 16 June 2002.

Tab D of Ex 948 contains a translation^"^ of the bank statements behind tab C, including a translation of each of pages 109571"^ to 10964.1"''

Report of the Oil-for-Food Incjuiry 254

Page s I I C - A R C - 1 0 0 5 6 5 an d IIC-ARC-10056 6 (E x 948 , Ta b D )

Pag e IIC-ARC-10056 5 o f E x 94 8 i s pag e 1095 7 o f th e ban k statement s fo r Alia' s eur o accoun t wit h th e Nationa l Ban k o f Jorda n an d cover s th e perio d fro m 3 Apri l 200 2 t o 1 0 Apri l 2002 . Pag e IIC-ARC-10056 6 i s th e followin g page , pag e 10958 , o f th e ban k statement s fo r tha t sam e accoun t an d cover s th e perio d fro m 1 0 Apri l 200 2 t o 2 1 Apri l 2002 .

Deposit offumis received front AWB

Th e thir d entr y o n pag e IIC-ARC-10056 5 record s th e deposi t o n 4 Apri l 200 2 o f €7,700,735.08 0 int o Alia' s eur o accoun t wit h th e Nationa l Ban k o f Jordan .

Thi s woul d appea r t o b e th e deposi t o f €7,700,743.0 8 whic h AW B pai d t o Ali a o n o r abou t 2 Apri l 2002 , bein g th e inlan d transportatio n fee s payabl e fo r thre e shipment s o f whea t whic h AW B mad e i n Marc h 200 2 (on e shipmen t unde r eac h o f it s contract s A0784 , A078 5 an d A1112) .

O n 2 Apri l 2002 , AWB' s Treasur y Operation s sen t a facsimil e t o it s bank"' ' t o transfe r €7,700,743.0 8 fro m AWB' s eur o accoun t t o Ali a (an d mor e particularl y t o th e nominate d accoun t o f Ali a wit h 'Th e Jorda n Nationa l Bank').'' '

Ban k statement s fo r AWB' s eur o accoun t recor d th e paymen t o n 2 Apri l 200 2 o f €7,700,743.0 8 fro m tha t account" ^ (consisten t wit h th e abov e facsimile) . Thi s paymen t appear s t o hav e bee n funde d b y th e deposi t tha t sam e da y int o AWB' s eur o accoun t o f foreig n exchang e receipt s o f exactl y th e sam e amoun t a s pai d t o Alia" ^ presumabl y a s a resul t o f a U S dolla r currenc y swa p o r exchange .

AWB' s interna l 'Eur o Paymen t Request ' fo r thi s transfe r i s date d 2 8 Marc h 2002." 4 I t identifie s th e thre e shipments" ^ t o whic h thi s paymen t relate s an d th e amoun t bein g pai d i n respec t o f eac h shipment." ^ Th e Divisio n requestin g thi s paymen t wa s 'Internationa l Marketin g — Middl e Eas t Desk'.i' ^

O n 7 Apri l 200 2 Ali a sen t a n emai l t o AW B stating :

W e h a v e receive d th e followin g amount : 770073 5 Euro , Pi s s e n d u s th e details ,

Th e questio n pose d i n thi s emai l woul d appea r t o hav e bee n directe d t o th e deposi t o f €7,700,735.08 0 o n 4 Apri l 200 2 recorde d i n th e thir d entr y o n pag e IIC-ARC-100565 .

O n 8 Apri l 200 0 M r Edmonds-Wilso n responde d t o Ali a b y advisin g tha t 'the amount of EUR 7,700,743.08'™ wa s 10 0 pe r cen t o f th e inlan d transpor t fee s payabl e i n respec t o f thre e specifie d vessels , bein g th e sam e thre e vessel s referre d t o i n th e AW B reques t fo r

payment .

Ther e i s a sligh t differenc e (o f €12 ) betwee n th e tota l amoun t whic h AW B instructe d it s banker s t o transfe r o n 2 Apri l 2002^2 1 (bein g als o th e amoun t tha t wa s deducte d

Report of the Oil-for-Food Incjuiry 2 5 5

from AWB's accounf^^) and the amount that is recorded on page nC-ARC-100565 as having been deposited into AHa's account on 4 April 2002.123 However this is likely to be the result of bank fees or similar bank charges having been deducted from the amount remitted by AWB by the recipient bank or an intermediary bank.

There are similar slight differences between the amount remitted by AWB to Alia and the deposits recorded in Alia's bank statements in relation to the each of the other deposits noted in this a p p e n d i x ' ' 24 as well as in relation to the deposits of inland transportation fees into Alia's Deutschmark account considered earlier in this appendix.

Crciiif entries oti these pnges

Page lIC-ARC-100565 (page 10957) also records that between 8 and 10 April 2002, seven transfers (totalling £2,075,493) were made from Alia's euro account to the credit of the General Maritime Transportation Company account with the Rafidain Bank.

There was also a further transfer of ¨5,585,072 from this account to the credit of the General Maritime Transportation Company account with the Rafidain Bank on 10 April 2002. This transfer is recorded the following page of the bank statements, namely page llC-ARC-100566 (page 10958).i25

Accordingly, within 7 days of the deposit into Alia's account of the ¨7,700,735.080 recorded in the third entry on page IIC-ARC-100565, a total of ¨7,660,565 was transferred from that account to the account of the General Maritime Transportation Company at the Rafidain Bank between 8 and 10 April 2002.

None of the entries appearing on pages lIC-ARC-100565 or llC-ARC-100566 recording these transfers identifies the purpose of the transfer or the vessel, shipment or supplier to which the transfer may r e l a t e.

Nevertheless, these entries all appear to represent the transfer of the ¨7,700,735.08 deposited in Alia's account on 4 April 2002 and thereby the transfer by Alia of inland transportation fees that have been paid to it by AWB in respect of shipments of wheat

to Iraq during the Oil-for-Food Programme.

This is because prior to that deposit, the balance of funds then standing in this euro account'27 was not sufficient to meet all of the transfers that were subsequently made from that account to the credit of the General Maritime Transportation Company's account at the Rafidain Bank between 8 and 10 April 2002. Nor would either

the sum of the other deposits into this account made between 4 and 8 April 2002 128 or

the total of the balance in the account as at 4 April 2002 together with the sum of all the other deposits into this account made between 4 and 8 April 2002

Report of the Oil-for-Food Incjuiry 256

hav e bee n sufficien t t o fun d th e tota l amoun t transferre d fro m thi s accoun t t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h th e Rafidai n Ban k betwee n 8 an d 1 0 Apri l 2002 .

Ther e i s als o recorde d o n IIC-ARC-10056 6 {pag e 10958 ) o n 1 7 Apri l 200 2 a furthe r transfe r o f fund s fro m thi s eur o accoun t o f Ali a t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Bank . Th e amoun t transferre d wa s €1,777,583.000 . Again , th e entr y i n th e ban k statemen t fo r thi s transfe r

doe s no t identif y th e purpos e o f thi s transfe r o r th e vessel , shipmen t o r supplie r t o whic h thi s transfe r ma y relate .

Ther e i s admittedl y nothin g i n thes e ban k statement s t o indicat e tha t thi s transfe r o n 1 7 Apri l 200 2 relate s i n an y wa y t o AW B o r t o whea t shippe d b y AW B t o Ira q unde r th e Oil-for-Foo d Programme . Nevertheless , i t represent s th e transfe r o f a significan t amoun t fro m tha t account . I t als o represent s th e transfe r o f a significan t portio n o f th e fund s the n standin g i n thi s eur o accoun t o f Alia , th e greate r proportio n o f whic h (i f no t all ) appea r t o hav e com e fro m deposit s o f inlan d transportatio n fee s pai d b y supplier s suc h a s AW B i n respec t o f shipment s t o Iraq . O n thei r face , thes e document s appea r t o b e consisten t wit h th e evidenc e give n t o thi s Inquir y o f Alia' s rol e betwee n Jul y 199 9 an d Marc h 200 3 bein g on e o f receivin g an d i n tur n passin g o n (t o th e

ISCWT ) inlan d transportatio n fee s pai d b y shipper s o f good s t o Iraq .

Pag e IIC-ARC-10056 8 (E x 948 , Ta b D )

Thi s documen t i s th e translatio n o f pag e 1096 0 o f th e ban k statement s fo r th e eur o accoun t maintaine d i n th e nam e o f Ali a wit h th e Nationa l Ban k o f Jorda n an d cover s th e perio d fro m 1 Ma y 200 2 t o 6 Ma y 2002 .

Deposit offiniils receivetl from AWB

Th e secon d entr y o n pag e IIC-ARC-10056 8 (pag e 10960 ) record s th e deposi t int o Aha' s

eur o accoun t o f €2,843,840.2 0 o n 5 Ma y 2002 .

Thi s woul d appea r t o b e th e deposi t o f €2,843,848.2 0 whic h AW B pai d t o Ali a o n 3 0 Apri l 2002 , being :

 inlan d transportatio n fee s o f €2,825,400.0 0 payabl e i n respec t o f a shipmen t o f whea t t o Ira q o n 9 Apri l 200 2 unde r contrac t Allll^^^ , togethe r wit h

 paymen t o f a furthe r €18,448.2 0 a s a n adjustmen t fo r th e inlan d transportatio n fee s payabl e i n respec t o f a n earlie r shipmen t unde r contrac t A0785.i3 o

O n 3 0 Apri l 2002 , AWB' s Treasur y Operation s sen t a facsimil e t o it s bank'^ i t o transfe r €2,843,848.2 0 fro m AWB' s eur o accoun t t o Ali a (an d mor e particularl y t o th e nominate d accoun t o f Alia ) wit h 'Th e Jorda n Nationa l Bank'.''' ^

Report of the Oil-for-Food Incjuiry 2 5 7

Bank statements for AWB's euro account recorci the payment on 30 April 2002 of ¨2,843,848.20 from that account'-"^? (consistent with the instructions given in the above facsimile). This payment appears to have been funded by the deposit that same day into AWB's euro account of exactly the same amount that was to be paid to Alia'^^ again presumably as a result of a US dollar currency swap or exchange. But for that deposit, there would not have been sufficient funds in AWB's euro account as at 30 April 2002 to make this payment to Alia.

AWB's internal 'Euro Payment Request' for this transfer is dated 29 April 2002."5 it identifies the two shipments'^^" to which this payment of ¨2,843,848.20 relates and the amount being paid in respect of each of these two shipments.'-*^ This payment of this amount and in respect of these two shipments was requested by 'International Marketing *Middle East Desk'.^^^

Again there is a slight difference (although this time it is ¨8) between the amount AWB instructed its bankers to pay on 30 April 20021'*^ (being the same amount that was deducted from AWB's euro account^^o) and the amount that is recorded on page

IIC-ARC-100568 as having been deposited into Alia's account on 5 May 2002.i4i However, this is again likely to be the result of bank fees or similar bank charges having been deducted by the recipient bank or an intermediary bank from the amount remitted by AWB.

Creilif L'titries on this page

Following this deposit of ¨2,843,840.20 on 5 May 2002, there are recorded on page IIC-ARC-100568 nine (9) transfers of funds (totalling ¨1,909,970.000) from this euro account of Alia to the credit of the account of the General Maritime Transportation Company account with the Rafidain Bank.

None of the entries for any of these transfers identifies the purpose of the transfer or the vessel, shipment or supplier to which the transfer may relate.

It is not possible from the information on page IIC-ARC-100568 to link any of these transfers to any particular deposit appearing on that page (or any other bank statement for this account) or to any particular shipment in respect of which inland transportation fees have been paid to Alia and deposited into its euro account.

Nevertheless, these entries represent the transfer of a significant portion of the funds standing in this euro account of Alia, the source of which appears to be deposits of inland transportation fees (such as those identified by the entries considered in this appendix) paid by shippers such as AWB to Alia. This is consistent with the evidence before this Inquiry of Alia's role between July 1999 and March 2003 being one of receiving and in turn passing on (to the ISCWT) inland transportation fees paid by shippers of goods to Iraq.

Report of the Oil-for-Footi Inquiri/ 258

Page IIC-ARC-100570 {Ex 948, Tab D)

This document is a translation of page 10962 of the bank statements for a euro account maintained in the name of Alia with the National Bank of Jordan and covers the period from 13 May 2002 to 26 May 2002.

Deposit of funds received from AWB

There is (on the second page of the translation of this page) an entry recording the

deposit of ¨3,202,521.090 into this account on 19 May 2002.

This would appear to be the deposit of ¨3,202,529.09 which AWB paid to Alia on 15 May 2002 being:

" inland transportation fees of ¨2,786,563.49 for a shipment of wheat to Iraq on 23 April 2002 under contract A1112, together with

" payment of a further ¨415,965.60 as an adjustment for the inland transportation fees payable in respect of an earlier shipment under contract Allll.

On 15 May 2002, AWB's Treasury Operations sent a facsimile to its bank"'42 to transfer ¨3,202,529.09 from AWB's euro account to Alia, to its nominated account with 'The Jordan National Bank'.i´

Bank statements for AWB's euro account record the payment on 15 May 2002 of ¨3,202,529.09 from that accounti44 (consistent with the above facsimile). This payment appears to have been funded by the deposit that same day into AWB's euro account of ¨ 2 6 , 1 0 5 , 7 7 3 . 3 5 . 1 45 This deposit was used to cover both the payment of ¨3,202,529.09 to Alia and another payment of ¨22,903,244.26 from this account. These total of two payments is exactly equal to the amount of deposited. The source of the deposit is not

apparent from the bank statement. In particular it is not apparent from the bank statement whether it was the product of a currency swap or the receipt of euros from some other source. But whatever the source of this deposit, without it, AWB would not have been able to make the payment of ¨3,202,529.09 to Alia from this account.

AWB's internal 'Euro Payment Request' for this payment is dated 14 May 2002.146 It identifies the two shipmentsi47 to which this payment of ¨3,202,529.09 relates and the amount being paid in respect of each of these two shipments.i4^ Payment of this amount in respect of these two shipments was requested by 'International

Marketing-Middle East Desk'.i^s

On 20 May 2002, Alia sent an email to Mr Edmonds-Wilson advising:

We have received the following amount, kindly send us the details; 3202521 Euro.i^o

The amount that Alia advised it had received coincided with the amount of the deposit into Alia's euro account the previous day, as recorded on page IIC-ARC-

Report of the Oil-for-Footi Inquiri/ 2 59

100570. Alia's inquiry of AWB would therefore appear to have been in relation to this deposit.

In an email dated 21 May 2002 Mr Edmonds-Wilson responded to Alia, advising that the 'The amount of EUR3,202,529.09''^^'^ was 100 per cent of the inland transportation fees for the shipment under contract A1112 and the balance for the other shipment in respect of which an adjustment was being made.

Although there is again a slight difference (namely ¨8) between the amount that AWB instructed its bank to pay to Alia on 15 May 2002^52 (also being the amount that was paid out of AWB's account^^^) and the amount that is recorded on page IIC-ARC-100570 as having been deposited into Alia's account on 19 May 2002'^^'^, this is again likely to be the result of bank fees or similar bank charges having been deducted by the recipient bank or an intermediary bank from the amount remitted by AWB.

Creiiit entries on this page

Following this deposit of ¨3,202,521.090 on 19 May 2002, there is recorded on page llC-ARC-100570 the transfer from this account on 21 May 2002 of ¨3,677,533.000 to the credit of the account of the General Maritime Transportation Company account with the Rafidain Bank.

This was followed by a further five transfers totalling ¨372,070 from this account on 22 May 2002 also to the credit of the account of the General Maritime Transportation Company account with the Rafidain Bank.

None of the entries for any of these six transfers identifies the purpose of the transfer or the vessel, shipment or supplier to which the transfer may relate.

It is not possible from the information recorded on this page IIC-ARC-100570 to link any of these transfers either to any particular deposit into this account or to any particular shipment(s) in respect of which inland transportation fees have been paid to Alia and deposited into this account (including any shipments of AWB).

There is also recorded on page llC-ARC-100570 prior to the deposit of ¨3,202,521.090 on 19 May 2002 five (5) earlier transfers (totalling ¨2,260,349) from this account to the credit of the account of the General Maritime Transportation Company with the Rafidain Bank on 13 and 14 May 2002. Moreover the preceding page of the bank statements for this account^^s records a further four transfers (totalling ¨371,596) from this account to the credit of the account of the General Maritime Transportation Company with the Rafidain Bank on 13 May 2002. It also records eight (8) transfers from this account to the credit of the account of the General Maritime Transportation Company with the Rafidain Bank made on 8 and 9 May 2002.

All of these entries represent the transfer of significant amounts from this euro account of Alia. They also represent the transfer of a significant portion of the funds standing in this euro account from time to time. The greater proportion of the funds so

Report of the Oil-for-Food I n c j u i ry 260

transferre d (i f no t al l o f them ) appea r t o com e fro m inlan d transportatio n fee s pai d t o Ali a b y supplier s suc h a s AW B an d deposite d int o thi s account . O n thei r face , thes e page s fro m th e ban k statement s fo r thi s accoun t ar e consisten t wit h th e evidenc e give n befor e thi s Inquir y o f Alia' s rol e a t thi s tim e bein g on e o f receivin g an d passin g o n (t o

th e ISCWT ) inlan d transportatio n fee s i n respec t o f shipment s t o Iraq .

Ti-iiitsfcr to Alia ami distribution of inland transportatio)i fees tcithin Iraq

Pag e UNO.0001.008 3 i n Exhibi t 8 1 date d 1 2 Jun e 200 2 record s th e receip t b y th e ISCW T fro m Ali a o f US$2,695,519.8 5 an d it s distributio n betwee n th e variou s Iraq i governmen t department s an d instrumentalities .

Tha t amoun t wa s th e U S dolla r equivalen t o f €2,779,592.0 0 sai d t o hav e bee n remitte d b y Ali a fro m tha t par t o f th e €3,202,529.0 9 whic h AW B pai d t o Ali a o n 1 5 Ma y 200 2 whic h wa s referabl e t o th e shipmen t mad e unde r contrac t A111 2 (bein g th e €2,786,563.4 9 pai d b y AW B i n respec t o f tha t shipmen t a s disclose d earlie r i n thi s

appendix) .

Th e bank s statement s fo r Alia' s eur o accoun t comprise d i n E x 94 8 d o no t disclos e th e transfe r fro m Ali a t o th e ISCW T o f th e €2,779,592.0 0 o r an y othe r amoun t referre d t o o n pag e UNO.0001.008 3 i n Exhibi t 81 . A n undate d documen t produce d t o thi s Inquir y b y th e Unite d Nation s heade d 'Australia n Whea t Boar d payments ' record s tha t a n amoun t o f €2,279,59 2 wa s transferre d b y Ali a t o th e ISCW T i n respec t o f thi s shipmen t an d tha t thi s wa s o n 2 3 Jun e 2002.^5 6 N o translate d ban k statement s fo r Alia' s eur o accoun t a s a t tha t dat e ar e include d i n Exhibi t 948 . I t i s therefor e no t possibl e t o verif y fro m tha t exhibi t o r thos e o f Alia' s ban k statement s tha t hav e bee n produce d t o thi s Inquir y whethe r suc h a transfe r wa s mad e an d when .

Nevertheless , i t doe s appea r fro m th e document s tha t th e Unite d Nation s ha s produce d t o thi s Inquir y (an d considere d i n mor e detai l i n Appendi x 25 ) tha t fund s wer e remitte d b y Ali a t o ISCW T i n respec t o f thi s shipmen t an d moreove r wer e distribute d betwee n variou s Iraq i governmen t department s an d agencie s i n th e

amount s se t ou t o n pag e UNO.0001.008 3 o f Exhibi t 81 .

Pag e IIC-ARC-10057 1 (E x 948 , Ta b D )

Thi s documen t i s a translatio n o f pag e 1096 3 o f th e ban k statement s fo r a eur o accoun t maintaine d i n th e nam e o f Ali a wit h th e Nationa l Ban k o f Jorda n an d cover s th e perio d fro m 2 7 Ma y 200 2 t o 1 0 Jun e 2002 .

Deposit of funds received from AWB

Th e thir d entr y o n thi s pag e i s a n entr y record s th e deposi t o f €5,220,113.61 0 int o thi s accoun t o n 2 7 Ma y 2002 .

Report of the Oil-for-Food Incjiiiri/ 2 6 1

This would appear to be the deposit of ¨5,220,121.61 which AWB paid to Alia on 24 May 2002 being 100 per cent of the inland transportation fees payable for two shipments of wheat to Iraq, one under contract A1112 and one under contract Allll.

On 24 May 2002, AWB's Treasury Operations sent a facsimile to its bank^^? to transfer ¨5,220,121.61 from its euro account to Alia (and more particularly to Alia's nominated account with 'The Jordan National Bank').i58

Bank statements for AWB's euro account record the payment on 24 May 2002 of this amount of ¨5,220,121.61 from that accounti-^? (consistent with the above facsimile). This payment appears to have been funded by the deposit into AWB's euro account that very same day of a foreign exchange receipt of exactly the same amount as was paid to Alia (namely ¨5,220,121.61).Both the deposit and transfer are recorded in the bank statement in the name of AWB Finance Limited.Presumably the deposit of these funds in this euro account was the result of a US dollar currency swap or exchange, made in order to obtain the euros necessary to make the payment to Alia.

AWB's internal 'Euro Payment Request' for this transfer to Alia of ¨5,220,121.61 is dated 22 May 2 0 0 2 . It identifies the two shipments^^-^ to which this payment of ¨5,220,121.61 relates and the amount being paid in respect of each of these two shipments.i'^4 yhis payment of this amount and in respect of these two shipments was requested by 'International Marketing *Middle East Desk'.^^^

On 27 May 2002, Aha sent an email to Mr Edmonds-Wilson advising:

We have received the following amount, kindly send us the details: 5220113 Euro.'^''

The amount that according to this email Alia had received coincides with the amount of the deposit of ¨5,220,113.610 into Alia's euro account on 27 May 2002 recorded on page IIC-ARC-100571.

The following day, in an email dated 28 May 2002 and timed 8:45 am Mr Edmonds-Wilson responded to Alia's request, referring Aha to an email that Mr Edmonds-Wilson had earlier sent in relation to two named vessels.This would appear to be a reference back to an email that Mr Edmonds-Wilson had sent to Alia two minutes

earlier that morning (at 8:43 am) advising it that ¨5,220,121.51 had been remitted on 24 May 2002 and identifying the two shipments to which that payment related and the amount of the payment made in relation to each shipment.

Although there is again a slight difference (namely ¨8) between the amount that AWB instructed its bank on 24 May 2002 to transfer to Alia's account with the Jordan National Bank^''^ (being the same amount that is recorded in AWB's bank statement for its euro account as having been paid from that account that same dayi'*^) and the amount that is recorded on page lIC-ARC-100571 as having been deposited into Alia's euro account on 27 May 2002^^'', this is again likely to be the result of bank fees or similar bank charges having been deducted from the amount remitted by AWB by the recipient bank or an intermediary bank.

Report of the Oil-for-Footi Inquiri/ 262

Ciciiif entries on this pn^^e

Page nC-ARC-100571 records that following this deposit of ¨5,220,113.610 on 27 May 2002, there were five (5) transfers (totalling ¨4,584,056) from this account to the credit of the account of the General Maritime Transportation Company with the Rafidain Bank between 28 May 2002 and 2 June 2002. I hese included two large transfers, both made on 2 June 2002. The first was of ¨1,353,390.000. The second was of ¨2,287,720.000.

Page IIC-ARC-100571 also records that on 5 June 2002, there v/ere two further transfers from this account to the credit of the account of the General Maritime Transportation Company with the Rafidain Bank. These were of ¨630,370 and ¨443,712 respectively.

It is not possible from the information recorded on this page IIC-ARC-100571 to link any of these seven transfers either to any particular deposit into this account or to any particular shipment(s) in respect of which inland transportation fees may have been deposited into this account.

Nevertheless these transfers (in particular the two recorded on 2 June 2002) represent the transfer of both significant amounts from this account and a significant portion of the funds standing in this euro account at the time these transfers were made, the greater proportion of which funds appear to have come from the deposit into this account of inland transportation fees paid by suppliers such as AWB.

Transfer to Alia and distribution of inland transportation fees within Iraq

Page UNO.0003.4892 of Exhibit 81 records the receipt from Aha of US$2,241,402.98.

This is the US dollar equivalent of the remittance by Alia in euros of a substantial portion of the funds that it received from AWB in respect of a shipment under contract Allll. This is the same shipment that comprises part of the ¨5,220,121.610 that was transferred by AWB to Alia's euro account with the Jordan National Bank on

27 May 2002. AWB paid to Alia ¨2,317,140.00 for the inland transportation fees in respect of this shipment.i^i

The undated document produced to this Inquiry by the United Nations headed 'Australian Wheat Board payments' records that an amount of ¨2,317,136 was received by Alia in respect of this s h i p m e n t . ^ ^^ j^is is ¨4 less than the amount AWB paid (which is in turn half of the ¨8 difference between the total amount paid by AWB on 24 May 2002^73 and the amount that is recorded on page IIC-ARC-100570 as having been deposited into Alia's euro account).

This same undated document also records that ¨2,320,979 was transferred by Alia from those funds.

It is not possible to locate any entry (or entries) in the bank statements comprised in Exhibit 948 reflechng that transfer.

Report of the Oil-for-Food Incjuiry 263

Th e dat e give n fo r thi s transfe r i n th e undate d documenti^' ^ i s 2 4 Jun e 2002 . N o translate d ban k statement s fo r Alia' s eur o accoun t a s a t tha t dat e ar e include d i n Exhibi t 948 . I t i s therefor e no t possibl e t o verif y fro m tha t exhibi t o r thos e o f Alia' s ban k statement s tha t hav e bee n produce d t o thi s Inquir y whethe r suc h a transfe r wa s

maci e an d when .

Nevertheless , i t seem s clea r fro m th e document s tha t th e Unitec i Nation s ha s prociuce d t o thi s Inquir y (an d considere d i n mor e detai l i n Appendi x 25 ) tha t fund s wer e remitte d b y Ali a i n respec t o f thi s shipmen t an d moreove r tha t thes e fund s wer e

distribute d betwee n variou s Iraq i governmen t department s an d agencie s i n th e amount s se t ou t o n pag e UNO.0003.489 2 i n Exhibi t 81 .

Pag e IIC-ARC-10057 2 (E x 948 , Ta b D )

Thi s documen t i s th e translatio n o f pag e 1096 4 o f th e ban k statement s fo r a eur o accoun t maintaine d i n th e nam e o f Ali a wit h th e Nationa l Ban k o f Jorda n an d cover s th e perio d fro m 1 0 Jun e 200 2 t o 1 6 Jun e 2002 .

Deposit of funds received front AWB

O n th e secon d pag e o f th e translatio n o f thi s pag e (behin d ta b D o f Exhibi t 948 ) ther e i s recorde d a deposi t o f €8,443,120.21 0 int o thi s accoun t o n 1 3 Jun e 2002 .

Thi s woul d appea r t o b e th e deposi t o f €8,443,128.2 1 whic h AW B pai d t o Ali a o n 1 1 Jun e 200 2 bein g 10 0 pe r cen t o f th e inlan d transportatio n fee s payabl e fo r thre e shipment s o f whea t t o Iraq , tw o unde r contrac t A111 2 an d on e unde r contrac t A l l l l .

O n 1 1 Jun e 2002 , AWB' s Treasur y Operation s sen t a facsimil e t o it s bank^ ^ t o transfe r €8,443,128.2 1 fro m it s eur o accoun t t o Ali a (o r mor e particularl y t o Alia' s nominate d accoun t wit h 'Th e Jorda n Nationa l Bank').i^ ^

Ban k statement s fo r AWB' s eur o accoun t recor d th e transfe r o n 1 1 Jun e 200 2 o f €8,443,128.2 1 fro m tha t account^^ ^ (consisten t wit h th e abov e facsimile) . Thi s paymen t appear s t o hav e bee n funde d b y th e deposi t tha t sam e da y int o AWB' s eur o accoun t o f foreig n exchang e receipt s o f exactl y th e sam e amoun t a s pai d t o Alia.'® " Th e deposi t

(credit ) o f thes e fund s i s recorde d i n th e ban k statemen t a s agains t AWB ; th e transfe r (debit ) i s recorde d i n th e ban k statemen t a s agains t AW B Financ e Limited.^^ ^ Given , tha t th e amoun t deposite d an d transferre d fro m thi s accoun t ar e identical , presumabl y th e fund s wer e deposite d int o thi s accoun t i n orde r fo r thi s paymen t t o Ali a t o b e mad e b y AWB .

AWB' s interna l 'Eur o Paymen t Request ' fo r thi s transfe r i s date d 7 J u n e 2 0 0 2 . ¡ t

identifie s th e thre e shipmentsi^- ^ t o whic h thi s paymen t o f €8,443,128.2 1 relate s an d th e amoun t bein g pai d i n respec t o f eac h o f thes e thre e s h i p m e n t s . j i ^ j g paymen t o f thi s amoun t an d i n respec t o f thes e tw o shipment s wa s requeste d b y 'Internationa l

Marketing-Middl e Eas t Desk'.is ^

2 6 4 lieport of the OU-for-Fooii Inqiiirt/

O n 6 Jun e 2002 , Ali a sen t a n emai l t o M r Edmonds-Wilso n requestin g

kindl y remi t th e a m o u n t s o f thes e v^essel s t o i n f o r m th e ISCW T t o avoi d delays : —

an d the n specifyin g thre e vessels .

Th e thre e vessel s nominate d b y Ali a wer e th e sam e thre e vessel s identifie d i n AWB' s 'Eur o Paymen t Request ' o f 7 Jun e 200 2 fo r th e paymen t o f €8,443,128.21 .18 7

O n 7 Jun e 2002 , M r Edmonds-Wilso n replie d t o Ali a b y emai l advisin g tha t a n amoun t o f €8,443,128.2 1 wa s bein g prepare d i n relatio n t o th e thre e vessel s nominate d i n Alia' s emai l an d woul d b e remitte d 'earl y nex t week' . M r Edmorids-Wilso n conclude d hi s emai l b y askin g Ali a to :

Pleas e i n f o r m t h e ISCW T tlia t th e a m o u n t i s bein g processe d a n d wil l b e pai d shortly .

O n 9 Jun e 2002 , Ali a sen t a furthe r ernai l t o M r Edmonds-Wilso n stating :

Kindl y i n f o r m u s a b o u t th e a m o u n t o f eac h vesse l separatel y o f th e tota l 844312 8 Euro .

Th e referenc e t o '844312 8 Euro ' i s presumabl y take n fro m M r Edmonds-Wilson' s emai l o f 7 Jun e 2002 .

O n 1 1 Jun e 200 2 M r Edmonds-Wilso n replie d i n a furthe r emai l t o Ali a providin g a breakdow n o f th e amoun t o f €8,443,128.2 1 a s betwee n th e thre e vessel s nominate d i n Alia' s emai l o f 6 Jun e 20021^*^ , bein g th e sam e thre e vessel s identifie d i n AWB' s

interna l 'Eur o Paymen t Request' ,

Althoug h ther e i s agai n a sligh t differeric e (namel y €8 ) betwee n th e tota l amoun t whic h AW B instructe d it s ban k t o transfe r t o Alia' s eur o accoun t wit h th e Jorda n Nationa l Ban k o n 1 1 Jun e (bein g th e sam e amoun t whic h th e ban k statement s fo r AWB' s eur o accoun t recor d a s havin g bee n pai d fro m ou t o f tha t accoun t o n 1 1 Jun e 20021^-3 ) an d th e amoun t recorde d o n pag e IIC-ARC-10057 2 a s havin g bee n

deposite d int o Alia' s accoun t o n 1 3 Jun e 20021^ ^ thi s i s agai n likel y t o b e th e resul t o f ban k fee s o r simila r ban k charge s havin g bee n deducte d fror n th e amoun t remitte d b y AW B b y th e recipien t ban k o r a n intermediar y bank .

Credit entries on tin- pcjoi

Followin g thi s deposi t o f €8,443,120.21 0 o n 1 3 Jun e 2002 , ther e ar e recorde d o n pag e IIC-ARC-10057 2 eleve n (11 ) transfer s fro m thi s accoun t t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h th e Rafidai n Ban k o n

1 6 Jun e 2002 .

Tw o o f thes e transfer s wer e fo r €1,966,189.00 0 an d €2,236.00 0 respectively . Th e entrie s fo r eac h o f thes e transfer s describ e th e transfer s a s bein g fo r 'tw o vessels' . Howeve r th e name s o f th e tw o vessel s wer e no t identifie d i n eithe r entry .

Report of the Oil-for-Food Incjuiry 2 6 5

Th e entr y fo r a thir d transfe r state s tha t th e transfe r wa s fo r th e vesse l Al Nawioaf. Thi s wa s no t a vesse l chartere d o r otherwis e employe d b y AW B fo r th e carriag e o f it s whea t durin g thi s period . Thi s transfe r therefor e doe s no t relat e t o AW B o r an y o f it s shipment s an d woul d appea r t o relat e t o anothe r shipper .

Althoug h th e entrie s fo r tw o othe r transfer s o n thi s pag e (bein g fo r €105,36 7 an d €560,72 9 respectively ) wer e eac h sai d t o b e fo r 'the vessel', th e nam e o f th e particula r vesse l t o whic h eac h transfe r relate s i s no t recorded .

Th e entr y fo r on e othe r transfe r o n thi s pag e wa s sai d t o b e fo r '40*2 feet of plastic'. Thi s woul d appea r no t t o relat e t o AW B o r an y AW B shipment . Th e entr y fo r anothe r transfe r o n thi s pag e state s tha t th e transfe r wa s i n respec t o f 'the supplier Laiex Company'. Again , thi s transfe r woul d appea r t o hav e nothin g t o d o wit h AW B o r an y

o f AWB' s shipment s o f wheat .

Th e entrie s fo r th e remainin g transfer s o n thi s pag e sugges t tha t thes e transfer s wer e i n relatio n t o good s tha t ha d bee n shippe d i n container s (an d a s suc h woul d agai n hav e nothin g t o d o wit h AW B o r it s shipment s o f whea t t o Ira q whic h wer e shippe d i n

bulk) .

I t i s no t possibl e fro m th e informatio n recorde d o n pag e llC-ARC-10057 2 t o lin k an y o f th e abovementione d transfer s t o an y particula r deposi t int o thi s eur o accoun t o f Ali a (includin g th e deposi t mad e o n 1 3 Jun e 200 2 o f inlan d transportatio n fee s pai d b y AWB ) o r mor e particularl y t o an y o f AWB' s shipment s o f whea t t o Ira q i n respec t o f whic h inlan d transportatio n fee s wer e pai d t o Alia .

Nevertheless , i t ca n b e sai d tha t th e variou s transfer s recorde d o n thi s pag e includ e th e transfe r o f significan t amount s fro m thi s eur o accoun t o f Alia . Moreover , the y als o represen t th e transfe r o f a significan t portio n o f th e fund s standin g t o th e credi t o f Ali a i n thi s eur o account , th e greate r proportio n o f whic h fund s (i f no t al l o f them ) appea r t o com e fro m th e paymen t t o Ali a o f inlan d transportatio n fee s b y supplier s suc h a s AW B an d th e deposi t o f thos e inlan d transportatio n fee s int o thi s eur o account .

2 6 6 Report of the Oil-for-Food l i i qiiiri /

Note s

1 O b t a i n e d b y tlii s I n q u i r y .

2 E x 141 , WS T.0007.000 1 a t 0002 , p a r a . 7 ; se e a l s o t h e f i n d i n g s o f t h e II C r e c o u n t e d i n C h a p t e r 26 .

3 O f D M 3 1 . 9 2 p e r t o n n e p e r s h i p m e n t (se e E x 160 , AWB.0144.0220 ) a n d E x 1462 , AWB.5049.0240_R .

4 T h i s b e i n g t h e firs t o f t h e c o n t r a c t s t h a t A W B c o n c l u d e d i n r e s p e c t o f w h i c h t h e a d d i t i o n a l 10 % a f t e r - s a l e s - s e r v i c e f e e w a s p a y a b l e a n d r e i m b u r s e m e n t o f t h a t f e e w a s i n c l u d e d a s p a r t o f t h e

c o n t r a c t price .

5 E x 1462 , A W B . 0 0 0 1 . 0 3 6 6 _ R

f > Se e C h a p t e r 26 .

7 E x 1462 , AWB.0001.0366_R .

8 E x 1462 , AWB.0006.0041_R .

9 E x 1462 , AWB.0006.0041_R . T h e i n s t r u c t i o n t o A W B ' s b a n k w a s i n fac t m a d e t h e f o l l o w i n g

d a y , 2 M a y 200 1 (E x 1462 , AWB.0164.0212_R) .

C o m m o n w e a l t h B a n k o f A u s t r a l i a .

1 1 E x 1462 , AWB.0164.0212_R .

1 2 E x 1462 , AWB.0164.0212_. R .

1 3 R a t h e r t h a n t h e E g y p t i a n A r a b L a n d B a n k , a s t h e U S d o l l a r p a y m e n t s h a d b e e n .

1 4 E x 1462 , AWB.0090.0277_R , AWB.0090.0283_R , AWB.0090.0294_R , A W B . 0 0 5 5 . 0 4 9 8 _ R , AWB.0090.0362_R .

1 5 E x 1462 , AWB.0164.0214_R .

1 6 DM10,054,797.64 .

1 7 DM10,054,785.450 .

1 ® T h e r e i s a s i m i l a r d i f f e r e n c e (o f D M 1 2 ) b e t w e e n t h e a m o u n t r e m i t t e d b y A W B a n d t h e a m o u n t r e c o r d e d a s h a v i n g b e e n r e c e i v e d b y Ali a i n r e l a t i o n t o e a c h o f t h e o t h e r t h r e e d e p o s i t s r e c o r d e d o n thi s b a n k s t a t e m e n t . T h e r e i s a l s o a s i m i l a r d i f f e r e n c e o f € 8 o r € 1 2 b e t w e e n t h e i n l a n d t r a n s p o r t a t i o n f e e s r e m i t t e d b y A W B i n e u r o s a n d t h e d e p o s i t o f t h o s e f e e s i n t o A l i a ' s e u r o a c c o u n t .

1 9 E x 1462 , AWB,0001.0170_R .

2 0 E x 1462 , AWB.0001.0170_R .

2 1 E x 1462 , AWB.0001.0366_R .

2 2 E x 1462 , AWB.0001.0176_R .

2 3 E x 1462 , AWB.0001.0366_R .

2- 1 E x 1462 , AWB.0001.0170_R , AWB.0001.0176_R .

2 5 E x 1462 , AWB.0001.0366_R .

2 6 E x 948 , IIC-ARC-100612 .

2 7 T h a t is , D M 5 7 7 , 4 6 8 . 0 0 / D M 5 7 8 , 9 1 6 . 4 4 = 0.997 5 o r 99.74% .

2 8 DM578,916.44 ; E x 1462 , AWB.0001.0366_R .

2 9 D M 5 7 7 , 4 6 8 . 0 0 0 (IIC-ARC-100612) .

3 0 N a m e l y D M 5 7 8 , 9 1 6 . 4 4 .

3 1 E x 1 4 1 , V S T . 0 0 0 7 . 0 0 0 1 a t 0002 , p a r a . 7 .

3 2 E x 1462 , AWB.0006.0002_R .

3 3 E x 1462 , AWB.0001.0366_R .

3 4 E x 1462 , AWB.OOO l .0366_R .

3 5 E x 948 , n C - A R C - 1 0 0 6 1 2 .

3 6 DM1,340,640.00 ; E x 1462 , AWB. OOOl.0366_R .

Report of the Oil-for-Foot i Inquir i / 2 6 7

DM1,337,288.00 (I1C-ARC-10G612).

38 Ex 141, WST.0007.0001 at 0002, para. 7.

For DM1,539,787.000 (IIC-ARC-100612).

For DM901,088.000 (IIC-ARC-100612).

41 For DM1,706,865.000 (IIC-ARC-100612).

42 For DM1,623,850.000 (IIC-ARC-100612).

43 Ex 1462, AWB.0001.0366_R.

44 Ex 1462, AWB.0001.0366_R.

45 Ex 1462, AWB.0001.0366_R.

46 Namely DM1,004,022 and DM1,337,288 respectively

47 Namely DMl,0Ub,539.74 and DM1,340,640 respectively (as recorded in Ex 1462,

AWB.00dl.0366_R).

48 Namely DM2,517.74 and DM3,352 respectively.

4'i Namely DM1,006,539.74 and DM1,340,640.00.

50 Sge third entry on the second page of the translation.

Of DM29.48 per toi^e per shipment.

52 Including the additional 10% after-sales-service fee.

53 Ex 1464, AWB.0009.0102_R and AWB.0009.0112_R.

Ex 1464, AWB.0009.0102_R and AWB.0009,0112_R.

35 Ex 1464, AWB.0091.0050_R and AWB.0002.0031^R.

36 Ex 1464, AWB.0091.0050_R and AWB.0002,0031_R,

57 Ex 1464, AWB.0091.0050_R and AWB.0002.0031_R.

3´ Ex 1464, AWB.0091.0050_R and AWB.0002.0031_R.

59 Namely DM529,661.26 and DM1,547,700 respectively.

Ex 1464, AWB.0009.0103_R.

fi Ex 1462, AWB. 0001.0176_R.

62 Ex 1462, AWB. 0001.0176_R.

Commonw/ealth Bank of Australia.

f4 Ex 1464, AWB.0079.0101_R.

65 Ex 1464, AWB.0162.0130_R.

Ex 1463, AWB.0137.0108_R at 0109_R; Mr Alvares wrote: 'For your information when

payment for Inland Transport Fee of DM14.00 per tonne is required to be made (i.e. 15 days

after BOL date). A request will have to be made Treasury Division as and when required.

Treasury Div will thereafter to a Currency Sump i.e. Buy DM in the Spot market (to pay the Inland

Transport Co) and Seel the DMfonvard to the date, when funds are expected from United Nations

i.e. 70/80 days later.' The reference to 'DM 14.00' above should be read as a reference to the

payment of the first instalment of the trucking fees of US$14 per tonne payable in Deutschmark.

67 Namely for DM1,004,022.000 and for DM1,337,288.000.

68 Ex 1462, AWB. 0001.0176_R.

6y Ex 1464, AWB.0009.0103_R.

70 As recorded in both AWB's facsimile of 24 May 2001 (Ex 1464, AWB.0001.0176_R) and AWB's

request for payment (Ex 1464, AWB.0009.0103_R).

71 Ex 141, WST.0007.0001.

72 The amount that should have been transferred would have been approximately

DM1,512,876.75 (being 99.75% of the amount paid by AWB in relation to that vessel).

73 See for example the reference to that vessel Ex 1464, AWB.0091.0243_R.

74 Ex 1462, AWB. 0001.0176_R.

Report of the Oil-for-Food Incjuiry 268

E x 1464 , AWB.0009.0103_R .

Se e t h e s e v e n t h c o m p e t e e n t r y o n t h e s e c o n d p a g e o f t!i e t r a n s l a t i o n o f thi s p a g e f r o m T a b C .

7 7 I n c l u d i n g t h e a d d i t i o n a l 10 % a f t e r - s a l e s - s e r v i c e fee .

7 8 E x 1462 , A W B . 0 1 6 4 . 0 2 2 0 _ R .

7 9 I n c l u d i n g t h e a d d i t i o n a l 10 % a f t e r - s a l e s - s e r v i c e fee .

8 0 E x 1464 , AWB.0164.0221_R .

8 1 C o m m o n w e a l t h B a n k o f A u s t r a l i a .

8 2 E x 1462 , AWB. OOOl.0180_R .

8 3 E x 1462 , AWB.OOO l .0180_R .

8 4 E x 1462 , AWB.0164.0220_R .

8 5 E x 1462 , AWB.0164.0220_R .

8 6 E x 948 , n C - A R C - 1 0 0 6 1 2 ( p a g e 2 o f t h e t r a n s l a t i o n ) .

8 7 E x 141 , WS T.0007.0001 .

8 8 E x 1462 , AWB.0001.0180_R .

8 9 E x 1464 , AWB.0164.0221_R .

9 0 E x 1462 , AWB.0001.0180_R .

9 1 E x 1464 , AWB.0164.0221_R .

9 2 I n c l u d i n g t h e a d d i t i o n a l 10 % a f t e r - s a l e s - s e r v i c e fee .

9 3 I n c l u d i n g t h e a d d i t i o n a l 10 % a f t e r - s a l e s - s e r v i c e fee .

9 4 Se e t h i r d e n t r y o n t h e t h i r d p a g e o f t h e t r a n s l a t i o n o f p a g e IIC-ARC-100612 .

9 5 I n c l u d i n g t h e a d d i t i o n a l 10 % a f t e r - s a l e s - s e r v i c e fee .

9 6 I n c l u d i n g t h e a d d i t i o n a l 10 % a f t e r - s a l e s - s e r v i c e fee .

9 7 E x 1462 , A WB.0079.0107_R .

9 8 E x 1462 , AWB.0079.0107_R .

9 9 C o m m o n w e a l t h B a n k o f A u s t r a l i a .

0 0 E x 1462 , AWB.0079.0106_R .

0 1 C o m m o n w e a l t h B a n k o f A u s t r a l i a .

0 2 E x 1462 , AWB.0144.0376_R .

0 3 E x 1462 , AWB.0091.0243_R .

0 4 E x 1462 , AWB. OOO l ,0218_R .

0 5 E x 948 , IIC-ARC-100565 .

0 6 E x 948 , I I C - A R C - 1 0 0 5 7 2 .

0 7 O b t a i n e d b y t h i s I n q u i r y .

0 8 E x 948 , I I C - A R C - 1 0 0 5 6 5 .

0 9 E x 948 , l I C - A R C - 1 0 0 5 7 2 .

1 0 T h e C o m m e r c i a l B a n k o f A u s t r a l i a .

1 1 E x 1468 , AWB.0161.0059_R .

1 2 E x 1468 , AWB.0161.0061_R .

1 3 E x 1468 , AWB.0161.0061_R .

1 4 E x 1468 , AWB.0161.0060_R .

1 5 B y v e s s e l n a m e , t o n n a g e s h i p p e d , c o n t r a c t n u m b e r a n d bil l o f l a d i n g d a t e 1 6 n a m e l y €2,264,038.0 0 i n r e l a t i o n t o c o n t r a c t A 0 7 8 4 , €2,751,607.2 0 i n r e l a t i o n t o c o n t r a c t A078 5 a n d €2,665,097.8 8 i n r e l a t i o n t o c o n t r a c t A l l 12 .

1 7 E x 1468 , AWB.0161.0060_R .

1 8 E x 1468 , AWB.OOO l .0264_R .

1 9 R e f e r r i n g t o t h e a m o u n t t h a t A W B h a d p a i d r a t h e r t h a n t h e a m o u n t r e f e r r e d t o i n A l i a ' s e m a i l .

Report of the Oil-for-Foot i Inquir i / 2 6 9

12 0 E x 1468 , AWB.0161.0060_R .

12 1 T h a t is-€7,700743.08 .

12 2 E x 1468 , A W B . 0 ] 6 1 . 0 0 6 1 _ R .

12 3 T h a t is-€7,700,735.080 .

12 4 A l t h o u g h i n t h e o t h e r t r a n s a c t i o n s n o t e d i n t h i s a p p e n d i x , t h e s e d i f f e r e n c e s a r e o f € 8 a n d n o t

t h e €1 2 f o u n d i n r e l a t i o n t o thi s t r a n s a c t i o n .

12 5 T h i s i s t h e firs t e n t r y r e c o r d e d o n p a g e 1095 8 ( b e i n g p a g e IIC-ARC-100566) .

12 6 C o m p a r e t h e c o r r e s p o n d i n g e n t r i e s a p p e a r i n g p a g e 741 7 o f A l i a ' s D e u t s c h m a r i < b a n k s t a t e m e n t s ( b e i n g E x 948 , llC-ARC-100612) .

12 7 N a m e l y €1,712,611.62 .

12 8 N a m e l y €2,044,513.09 .

12 9 T h i s p a y m e n t w a s m a d e o n t h e t o t a l a m o u n t o f t h e w h e a t s h i p p e d o n b o a r d t h e r e l e v a n t

vessel , a l t h o u g h n o t al l o f t h a t w h e a t w a s d i s c h a r g e d i n I r a q (E x 1468 , AWB.0143.0198_R) .

A c c o r d i n g l y , a n a d j u s t m e n t w a s m a d e t o t h e i n l a n d t r a n s p o r t a t i o n f e e s p a i d t o Ali a i n r e l a t i o n

t o late r s h i p m e n t s t o t a k e a c c o u n t o f inte r ali a t h e o v e r p a y m e n t o f i n l a n d t r a n s p o r t a t i o n f e e s o n t h i s o c c a s i o n (se e E x 1468 , AWB. OOOl.0276_R) .

13 0 E x 1468 , AWB.0001.0269_R .

13 1 C o m m e r c i a l B a n k o f A u s t r a l i a .

13 2 E x 1468 , AWB.0161.0067_R .

13 3 E x 1468 , A W B . 0 1 6 1 . 0 0 6 1 _ R .

13 4 E x 1468 , AWB.0161.0061_R , 13 5 E x 1468 , AWB.0161.0068_R .

3 6 B y v e s s e l n a m e , t o n n a g e s h i p p e d , c o n t r a c t n u m b e r a n d bil l o f l a d i n g d a t e .

13 7 N a m e l y €2,825,40 0 i n r e s p e c t o f t h e s h i p m e n t u n d e r c o n t r a c t A 1 1 1 2 a n d €18,448.2 0 i n r e s p e c t o f t h e s h i p m e n t u n d e r c o n t r a c t A0785 .

13 8 E x 1468 , AWB.0161.0068_R .

13 9 €2,843,848.20 .

14 0 E x 1468 , AWB.0161.0069_R .

14 1 €2,843,840.20 .

14 2 C o m m e r c i a l B a n k o f A u s t r a l i a .

14 3 E x 1468 , AWB.0079.0062_R .

14 4 E x 1468 , A W B . 0 1 6 1 . 0 0 7 8 ^ R .

14 5 E x 1468 , AWB.0161.0078_R .

14 6 E x 1468 , AWB.0079.0063_R .

14 7 B y v e s s e l n a m e , t o n n a g e s h i p p e d , c o n t r a c t n u m b e r a n d bil l o f l a d i n g d a t e .

14 8 N a m e l y €2,786,563.4 9 i n r e s p e c t o f t h e s h i p m e n t u n d e r c o n t r a c t A l l 1 2 a n d €415,965.6 0 i n r e s p e c t o f t h e p a y m e n t t h a t w a s a n a d j u s t m e n t o f i n l a n d t r a n s p o r t a t i o n f e e s t h a t h a d b e e n e a r l i e r p a i d i n r e s p e c t o f a s h i p m e n t u n d e r c o n t r a c t A l l l l .

14 9 E x 1468 , AWB.0079.0063_R .

15 0 E x 1468 , AWB. OOOl.0271_R .

15 1 B e i n g t h e a m o u n t t h a t A W B i n s t r u c t e d it s b a n k e r s t o t r a n s f e r t o A l i a ' s a c c o u n t w i t h t h e J o r d a n N a t i o n a l B a n k .

15 2 N a m e l y €3,202,529.09 .

15 3 E x 1468 , AWB.0161.0078_R .

15 4 N a m e l y €3,202,521.090 .

15 5 N a m e l y p a g e I I C - A R C - 1 0 0 5 6 9 ( p a g e 10961 ) c o v e r i n g t h e p e r i o d f r o m 6 t o 1 3 M a y 2002 .

15 6 E x 1377 , U N O . 0 0 0 3 . 4 8 5 2 (I] C-ARC-004995) .

2 7 0 Report of the OU-for-Food Inquirí/

I'' ? C o m m e r c i a l B a n k o f A u s t r a l i a .

E x 1468 , A W B . 0 0 7 9 . 0 0 6 4 3 .

'S' J E x 1468 , AWB.0161.0082_R .

iw i E x 1468 , AWB.0161.0082_R .

'6 1 E x 1468 , AWB.0161.0082_R .

16 2 E x 1468 , AWB.0079.0065_R .

'6 3 B y v e s s e l n a m e , t o m i a g e s h i p p e d , c o n t r a c t n u m b e r a n d bil l o f l a d i n g d a t e .

'6 4 N a m e l y €2,902,981.6 1 i n r e s p e c t o f t h e s h i p m e n t u n d e r c o n t r a c t A l l 1 2 a n d €2,317,140.0 0 i n

r e s p e c t o f t h e s h i p m e n t u n d e r c o n t r a c t A l l l l .

16 5 E x 1468 , AWB.0079.0065_R .

'6 f E x 1468 , AWB.0001.0272_R .

'6 7 E x 1468 , AWB.0001.0272_R .

16 « N a m e l y €5,220,121.61 ; E x 1468 , AWB.0079.0064_R .

16' ^ E x 1468 , AWB.0161.0082_R .

17 0 N a m e l y €5,220,113.610 .

17 1 E x 1468 , AWB.0079.0065_R .

17 2 E x 1377 , U N O . 0 0 0 3 . 4 8 5 2 (IIC-ARC-004995) .

17 3 N a m e l y €5,220,121.61 ; E x 1468 , AWB.0079.0064_R .

17 4 N a m e l y €5,220,113.61 .

17 5 E x 1377 , U N O . 0 0 0 3 . 4 8 5 2 (IlC-ARC-004995) .

17 6 E x 1377 , U N O . 0 0 0 3 . 4 8 5 2 (IIC-ARC-004995) .

17 7 C o m m e r c i a l B a n k o f A u s t r a l i a .

17 8 E x 1468 , AWB.0079.0026_R .

17 9 E x 1468 , AWB.0161.0088_R .

18 1 E x 1468 , AWB.0161.0088_R .

18 1 E x 1468 , AWB.0161.0088_R .

i« 2 E x 1468 , AWB.0079.0027_R .

18 3 B y v e s s e l n a m e , t o n n a g e s h i p p e d , c o n t r a c t n u m b e r a n d bil l o f l a d i n g d a t e .

i« 4 N a m e l y €2,842,02 0 a n d €2,842,57 4 f o r t h e t w o s h i p m e n t s u n d e r c o n t r a c t A l l 1 2 a n d

€2,758,534.2 1 f o r t h e s h i p m e n t u n d e r c o n t r a c t A l l l l .

18 5 E x 1468 , AWB.0079.0027_R .

18 6 E x 1468 , A W B . 0 0 0 1 . 0 2 7 4 ^ R a t 0275_R .

18 7 E x 1468 , AWB.0079.0027_R .

18 8 E x 1468 , AWB.0001.0274_R .

18 9 E x 1468 , AWB.0001.0274_R .

i w E x 1468 , AWB.0001.0274_R .

19 1 E x 1468 , AWB.0079.0027_R .

19 2 N a m e l y €8,443,128.21 ; E x 1468 , AWB.0079.0026_R .

19 3 E x 1468 , AWB.0161.0088_R .

19 4 N a m e l y €8,443,120.21 .

Report of the Oil-for-Footi Inquiri/ 2 7 1

Appendix 25 Iraq's application of funds

received from Alia

Introduction

Included amongst the documents that the United Nations provided to this Inquiry were translations of five documents headed 'MOU goods transport form'. These were translations of (Iraq) Ministry of Transport records^ and were described by the tlC in its final report as forms for the transferring of MOU^ goods. ^

The translations were tendered as Exhibits 80 and 81 in this Inquiry.

The document of which Exhibit 80 is a translation was also the subject of consideration and comment by the IIC in its final report.^ In that context, a very similar translation of the original Arabic document was reproduced in the IlC's final report. ^ A copy of that document has also been reproduced in Chapter 26.^

The translations and the associated documents (in Arabic) are identified in the Table 25.1.

Each of these five documents records the distribution as between certain departments and agencies of the then government of Iraq of amounts which Alia remitted to the ISCWT (Ministry of Transport) from inland transportation fees^ that AWB paid to Alia in respect of wheat that AWB had shipped in bulk from Australia to Iraq under the Oil-for-Food Programme pursuant to contracts for the sale of wheat that AWB concluded with the 1GB.Æ

Table 25.1 MOU Goods Transport Forms

Original Arabic English translation Date Exhibit no.

UNO.0003.4874 (IIC-ARC-005017) UNO.0003.4875 (IIC-ARC-005018) 1 June 2002 Exhibit 80

UNO.0001.0084 (IIC-ARC-000082) UNO.0001,0083 (IIC-ARC-000081) 12 June 2002 Exhibit 81

UNO.0003.4855 (llC-ARC-004998) UNO.0003.4856 (IIC-ARC-004999) 13 June 2002 Exhibit 81

UNO.0003.4891 (IIC-ARC-005034) UNO.0003.4892 {IIC-ARC-005035) 6 July 2002 Exhibit 81

UNO.0003.4948 (IIC-ARC-005091) UNO.0003.4949 (IIC-ARC-005092) 28 December 2002 Exhibit 81

Report of the Oil-for-Food Incjuiry 273

UNO.0003.4875 (Exhibit 80)

Summary

This document records the collection of US$2,247,211.26 from Alia in respect of a shipment of Australian wheat discharged at Umm Qasr from the vessel Bei Hal in May 2002^ and the subsequent distribution of those funds as between various departments and agencies of the then government of Iraq.

This was a shipment by AWB under its contract A1112 with the 1GB. This was a contract under phase XI of Ihe Oil-for-Food Programme. On 18 April 2002 AWB paid to Alia inland transportation fees^o of ¨2,326,800 in respect of this shipment." These fees formed part of ¨4,620,258.48 which AWB instructed its bank on 18 April 2002 to

transfer to Alia's account at the Jordan National Bank. These fees were deposited into Alia's euro account with the Jordan National Bank on 22 April 2002.13

From the inland transportation fees it had received. Alia in turn transferred ¨2,320,97914 to the ISCWT (Iraqi Ministry of Transport).>5 This was after deduction of ¨5,817, being the commission of 0.25 per cent of the inland transportation fees that Alia received in return for collecting these fees on behalf of the ISCWT.

Of the funds that the ISCWT (Ministry of Transport) collected from Alia in respect of this shipment on the Bei Hai (namely US$2,247,211.26)i? a total of US$2,247,210.93 was distributed between various departments and agencies of the then government of Iraq

in the amounts identified in Exhibit 80 and repeated in Table 25.2.

The shipment

The shipment of Australian wheat to Iraq referred to in Exhibit 80 is described in that document as being a shipment under 'Phase 11' (of the Oil-for-Food Programme) and in particular pursuant to United Nations approval (Comm) number '11013'.Exhibit

80 also records the letter of credit from BNP referable to this shipment, namely L/C no. 733475.1'' In fact, the United Nations approval number has been erroneously stated in Exhibit 80. United Nations approval (Comm) number 1100013 was the relevant United Nations approval associated with BNP letter of credit 733475.2" It is also therefore this approval (Comm) number that is applicable to this shipment.

United Nations approval (Comm) no. 1100013 was issued to the Australian permanent mission to the United Nations in relation to AWB contract A1112 dated

20 December 2001.21 j ^ js ^ ^g g contract for the supply of wheat in bulk that AWB

concluded with the IGB. The United Nations approval dated 4 February 2002 was issued on 5 February 2002,22

The shipment referred to in Exhibit 80 was carried to Iraq on the Bei Hai.

Report of the Oil-for-Food Incjuiry 274

This was the second of AWB's shipments of wheat to Iraq under contract A1112. On 22 March 2002 AWB sought permission from DFAT for the export of wheat from

Austraha to Iraq on the Bei Hai under contract AH12. DFAT granted permission later that day.Loading of the vessel was completed by 2 April 2002.24 The vessel would have left Australia for Iraq shortly thereafter.

According to Exhibit 80, the Bei Hai anchored (presumably off the port of d i s c h a r g e 25 Umm Qasr) on 4 May 2002 and left the port on 26 May 2002.2" This was after it had

completed discharge of her cargo. 2^ This date of departure also accords with the date of the vessel's departure from Umm Qasr recorded in Cotecna's inspection notes for this shipment. 28

The ship's load is described in Exhibit 80 as having been:

42000 - 241.360 =

41,758.610 Tons.ª

The first of these figures (namely 42000) accords with the quantity of the cargo that was shipped on board the Bei Hai in Australia, as disclosed on both the bill of lading issued in respect of this shipment^" and AWB's invoice to the IGB (namely 42,000 tonnes).31 The last figure in the box labelled 'ship load' (namely 41,758.610 tons) accords with the quantity of wheat that was recorded by Cotecna as having been discharged from the vessel in Iraq^^, being the amount for which the AWB Pool was ultimately paid from the escrow account in respect of this shipment.-'^''

Inland transportation fees recorded in Exhibit 80

The total amount that was collected from Alia in respect of this shipment on the Bei Hai was US$2,247,211,26.This is the amount that is recorded next to the box labelled 'Total Collected' in Exhibit 80 and appears to be the product of the figures appearing in the box at the foot of that document under the heading 'Comments':

Comments: (1) Transport fees: the total amount: 2,320,976 Euro on 6/3 S=2,251,346 USD 19666/8/33 (2) Service fees: the HlegiMe 4,138.39 USD 10/120.^^

It would seem from these 'Comments' that transport fees totalling ¨2,320,976 were collected from This was equal to US$2,251,346. A service fee of US$4,138.39 was then deducted from this amount, yielding the amount described in Exhibit 80 as

the'Total Collected' (namely US$2,247,211.26).37

Of these funds, a total of US$2,247,210.93 was distributed to:

Land / Ports / Water / Additional / Services / Insurance^´

in the manner and amounts set out in the table appearing in the bottom half of the document.

Report of the Oil-for-Footi Inquiri/ 275

Inlan d transportatio n fee s pai d b y A W B

A t th e tim e i t conclude d contrac t A111 2 wit h th e IGB , AW B agree d t o pa y inlan d transportatio n fee s (includin g th e additiona l 1 0 pe r cen t after-sales-servic e fee ) o f €55.4 0 pe r tonn e o f whea t shippe d unde r tha t contract.^ ^

Thi s fe e wa s (o n AWB' s calculations ) equivalen t t o US$48.9 7 pe r tonne . O f this , US$26.5 0 pe r tonn e represente d th e lan d transpor t f e e . T h e balanc e (US$27.4 7 pe r tonne ) represente d th e additiona l 1 0 pe r cen t after-sales-servic e fee^ i whic h ha d bee n

payabl e i n respec t o f contract s conclude d afte r Novembe r 2000 .

O n 1 8 Apri l 200 2 AW B instructe d il s bank^ ^ t o transfe r €4,620,258.4 8 fro m AWB' s eur o accoun t t o Ali a (o r mor e particularl y t o Alia' s designate d accoun t wit h th e Jorda n Nationa l Bank) .

O f this , €2,326,80 0 wa s paymen t o f 10 0 pe r cen t o f th e inlan d transportatio n fee s payabl e i n respec t o f th e whea t shippe d o n th e Bei Hai unde r contrac t A1112.-' 4 Th e balanc e wa s paymen t o f th e inlan d transportatio n fee s fo r a shipmen t o f whea t t o Ira q o n anothe r vesse l unde r contrac t Allll^ ^ (bein g th e shipmen t referre d t o i n

UNO.0003.485 6 i n Exhibi t 8 1 whic h i s considere d late r i n thi s appendix) .

Th e ban k statemen t fo r AWB' s eur o accoun t confirm s tha t €4,620,258.4 8 wa s transferre d fro m tha t accoun t o n 1 8 Apri l 20024^ , i n accordanc e wit h AWB' s instructions . Thi s paymen t appear s t o hav e bee n funde d fro m th e deposi t o f a n identica l sum4 7 int o AWB' s eur o ban k accoun t th e followin g da y (1 9 Apri l 2002) .

Include d amongs t th e document s produce d b y th e Ali a t o th e II C an d whic h th e Unite d Nation s i n tur n produce d t o thi s Inquir y wer e a numbe r o f ban k statement s fo r variou s account s maintaine d b y Ali a i n it s nam e wit h th e Jorda n Nationa l Bank . Thes e include d ban k statement s fo r a eur o account , includin g fo r th e perio d fro m Apri l t o mi d Jun e 2002 . Som e o f thes e ban k statement s (an d thei r translations ) wer e tendere d befor e thi s Inquir y a s Exhibi t 948.4 ^

Withi n Exhibi t 94 8 ther e i s recorde d o n pag e IIC-ARC-100567 , bein g pag e 1095 9 o f th e ban k statement s fo r Alia' s eur o accoun t wit h th e Jorda n Nationa l Bank , a n entr y recordin g th e deposi t o f €4,620,250.4 8 int o tha t accoun t o n 2 2 Apri l 2002 .

Thi s woul d appea r t o b e th e deposi t o f th e €4,620,258.4 8 tha t AW B instructe d it s ban k t o transfe r t o Alia' s eur o accoun t wit h th e Jorda n Nationa l Ban k o n 1 8 Apri l 2002 , par t o f whic h represente d th e paymen t o f th e inlan d transportatio n fee s i n respec t o f th e shipmen t o n th e Bei Hai unde r contrac t A1112 .

O n 2 3 Apri l 200 2 Ali a sen t a n emai l t o M r Edmonds-Wilso n inquiring :

W o u l d yo u b e kin d t o sen d u s th e detail s o f thi s amount : 462025 0 E u r o . ' '

Thi s inquir y appear s t o hav e bee n directe d a t thi s deposi t int o Alia' s eur o accoun t o l €4,620,250.4 8 o f 2 2 Apri l 2002 .

2 7 6 Report of the OU-for-Food Inquir í /

On 24 April 2002 Mr Edmonds-Wilson replied in an email to Alia advising that 'Viis mnouiit ivns 100% Inland Transport payment' for two named vessels.One of the vessels named in that email was the Bei HaiP (The other was the vessel that is referred to in UNO.0003.4856 in Exhibit 81 which is considered later in this appendix).

Although there is a difference of ¨8 between the amount which AWB instructed its bankers to pay to Alia on 18 April 2002^^ (which is also the amount recorded in the bank statement for AWB's euro account as having been paid from out of that account on 18 April 2002^5) and the amount which page IIC-ARC-100567 records as having been deposited into Alia's euro account on 22 April this slight discrepancy is likely to have been caused by the deduction of bank fees or charges from the amount remitted by either the receiving bank or an intermediate bank.^^ A similar difference between the amount paid by AWB to Alia and the amount deposited into Alia's account is also found in respect of each of the payments and deposits considered in

this appendix, as well as in the payments and deposits considered in Appendix 24.

As has already been observed, the total amount of the 'Transport fees' recorded in the box at the foot of Exhibit 80 is ¨2,320,976.5Æ The difference between that figure and the amount that AWB paid Alia on account of the shipment on the Bei Hai^'^ (as part of the ¨4,620,258.48 transferred to Alia's euro account on 22 April 2002)^ª is ¨5,824. This is 0.25 per cent (or approximately one quarter of one per cent) of the amount paid by AWB^i in respect of this shipment. This is consistent with the evidence of Mr AI-Absi before this Inquiry to the effect that at this time Alia was paid a commission of 0.25 per cent of the inland transportation fees that it received, including from AWB, in return for its agreement to receive and pass onto the ISCWT inland transportation fees.

Accordingly, the amount disclosed as 'Transport fees' in the box at the foot of Exhibit 80 (namely ¨2,320,976) represents the amount that Alia remitted to the ISCWT (Iraqi Ministry of Transport) after Alia had retained its 0.25 per cent commission.

On 1 May 2002 Alia sent a letter to 'The state Co For Water Transport *Basra'^^ stating:

Subject: Ship BEI HAI

Greetings [Hand written] 2,326,796 Euros

We would like to inform you that we received the Amount (2,326,796 Euros) from the

Australian Board for the above mentioned ship of Australian wheat, please take note of that

and take necessary action.

The amount of the inland transportation fees said by Alia to have been received by it (namely ¨2,326,796) coincides (within ¨4) of the amount paid by AWB in respect of this shipment (namely ¨2,326,800).

This ¨4 difference between these two amounts is exactly half the ¨8 difference between the total amount that AWB instructed its bank to transfer to Alia on 18 April 2002 and

Report of the Oil-for-Food Inquirif 277

the amount that Alia's bank statements record as having been deposited into its euro account on 22 April 2002.This is consistent with this ¨8 difference having been split equally between the two shipments to which AWB's transfer of 18 April 2002 related.

There was also included amongst the documents that the United Nations produced to this hiquiry a table said to be of AWB payments for the period from 1 January 2002 to 24 June 2002*^" together with a translation of that document.The third row of the table refers to the Bei Hai (and AWB's shipment of wheat on that vessel).

This table records in respect of the shipment on the Bei Hai:

" an amount of ¨2,326,796 under the column headed 'Received Amount'.^^ This is the same amount which Alia acknowledged having received from AWB in respect of this shipment in its letter of 1 May 2002 to the State Co. for Water Transport.^" It also corresponds (within ¨4) to the ¨2,326,800 paid by AWB to Alia in respect of the Bei Hai shipment.^i

" an amount of ¨2,320,979 under the column headed 'Transferred Amount'.This figure corresponds (within ¨3) to the ¨2,320,976 that is recorded in the box at the foot of Exhibit 80 as being the total amount of the 'Transport fees'.^^

The difference between these two amounts is ¨5,817. This is 0.25 per cent (or one quarter of one per cent) of the amount that Alia received from AWB in respect of this shipment and thereby represents the commission withheld by Alia from the inland transportation fees paid to it in respect of this shipment, consistent with Mr Al-Absi's evidence.

Following the deposit of ¨4,620,250.48 into Alia's euro account on 22 April 2002, there were a number of transfers of funds from this account to the credit of the account of the General Maritime Transportation Company with Rafidain Bank.^s The entries for

some of these transfers are expressed to be in relation to 'the vessel' although no vessel is named. None of these transfers are expressed specifically to be in relation to the Bei Hai or the shipment of wheat to Iraq on that vessel in 2002 or to AWB or its contract A1112. It is not possible to find within those bank statements for this account

that have been translated and included in Exhibit 948 any entry recording the transfer of ¨2,320,97676 ¨2,316,709.6277 or any similar amount at or about the relevant time, which might be referable to the transfer by Alia of the inland transportation fees that it received in respect of this shipment on the Bei Hai.

The table of AWB payments for the period from 1 January 2002 to 24 June 2002^8 (referred to above) has a column headed 'Date'. This would seem to record the date on which funds were transferred by Aha. The entry in that column for the shipment on the Bei Hai records that the fees collected by Alia were transferred by it on 3 June 2002.79 xhat this was the date when Alia transferred those fees would also appear to be confirmed by Exhibit 80.Æ∞

Report of the Oil-for-Footi Inquiri/ 278

Howeve r ther e i s n o transfe r o f eithe r €2,320,97 6 o r €2,316,709.6 2 o r an y simila r amoun t o r an y entr y recordin g th e transfe r o f suc h a n amoun t specificall y referabl e t o thi s shipmen t o n (o r about ) tha t dat e recorde d i n th e ban k statemen t fo r Alia' s eur o

accoun t withi n Exhibi t 948.8 1 Whils t ther e i s recorde d o n pag e lIC-ARC-10057 1 o f Exhibi t 94 8 a transfe r o f €2,287,72 0 havin g bee n mad e fro m Alia' s eur o accoun t t o th e credi t o f th e accoun t o f th e Genera l Maritim e Transportatio n Compan y wit h Rafidai n Ban k o n 2 Jun e 2002^^ , i t i s no t apparen t eithe r fro m th e ban k statemen t itsel f o r fro m an y o f evidenc e befor e thi s Inquir y whethe r thi s transfe r relate s t o thi s shipmen t o n th e Bei Hai o r i s i n respec t o f som e othe r vesse l o r shipment .

I t i s als o no t possibl e t o discer n fro m th e evidenc e befor e thi s Inquir y whethe r th e €2,320,97 6 o r €2,316,709.6 2 o f inlan d transpor t fee s collecte d b y Ali a an d transferre d t o th e ISCW T (Iraq i Ministr y o f Transport ) wa s transferre d a s a singl e paymen t o r a s a numbe r o f payment s an d i f s o whe n thi s occurred .

Nevertheless , havin g regar d t o th e content s o f Exhibi t 80 , i t appear s tha t almos t all® ^ o f th e inlan d transportatio n fee s tha t Ali a receive d i n respec t o f thi s shipmen t o n th e Bei Hai wer e transferre d t o th e ISCW T (Iraq i Ministr y o f Transport ) an d tha t thes e funds® ^ wer e i n tur n distribute d betwee n th e variou s department s an d agencie s o f th e the n Iraq i governmen t i n th e amount s an d manne r se t ou t i n tha t document .

Ther e i s recorde d i n a not e i n Arabi c date d 2 9 Ma y 200 2 regardin g th e Bei Hai an d sen t b y 'Marin e Agencie s — Shipping ' t o 'Financia l Department' :

Pleas e organis e th e for m fo r th e shi p a b o v e k n o w i n g tha t i t i s i n c l u d e d i n p h a s e eleve n a n d i t include s th e a m o u n t o f 5 0 Cent s pe r ton.^ s

Ther e wa s als o recorde d o n thi s not e th e followin g breakdow n o f th e amount s t o b e receive d fro m th e supplier :

46.9 5 US D transpor t fee s

-0.5 0 US D c o m m i s s i o n

46.4 0 - 26.0 0 th e m a i n t r a n s p o r t

20.4 0 U S D afte r sal e service s

Th e rat e o f US$46.9 5 pe r tonn e nominate d i n thi s documen t doe s no t accor d precisel y wit h th e tota l inlan d transportatio n fee s pe r tonn e (expresse d i n U S dollars ) calculate d b y AW B i n respec t o f it s shipment s unde r contrac t AllH.^ ^ Nevertheles s i t ma y b e inferre d fro m th e breakdow n recorde d o n thi s not e tha t th e inlan d transportatio n fee s pai d b y AW B i n respec t o f th e shipmen t o n th e Bei Hai included :

 a commissio n o f US$0.5 0 pe r tonne ,

 a componen t fo r th e transpor t fe e o f US$26.0 0 pe r tonn e fo r th e 'mai n transport '

 a componen t fo r after-sales-servic e (whic h o n thes e figure s wa s US$20.40) .

Report of the Oil-for-Food Incjuiry 2 7 9

I n relatio n t o th e firs t o f thes e elements , th e US$0.5 0 pe r tonn e commission , thi s woul d appea r t o hav e bee n a lev y impose d fo r th e recover y o f th e cos t o f th e por t fee s tha t th e precedin g yea r th e Iraqi s ha d sough t impos e o n AWB . B y Jun e 2001 , thi s US$0.5 0 pe r tonn e por t fe e charg e ha d bee n incorporate d int o th e inlan d transportatio n fe e payabl e i n respec t o f suc h shipments .

I n relatio n t o th e secon d element , o f th e inlan d transportatio n fee s o f €55.4 0 pe r tonn e payabl e unde r contrac t A1112 , US$26.5 0 pe r tonn e wa s fo r th e transpor t component .

Thi s wa s th e transpor t fe e tha t wa s nominate d b y th e IG B an d include d US$0.5 0 pe r tonn e o n accoun t o f por t fees . Th e su m o f thes e firs t an d secon d element s i s equa l t o thi s US$26.5 0 pe r tonn e fe e designate d b y th e IG B a t th e tim e contrac t A111 2 wa s

concluded .

A s fo r th e thir d element , i t i s clea r fro m th e foregoin g breakdow n tha t th e balanc e o f th e amoun t sai d t o b e payabl e b y th e supplie r (AWB ) afte r deductio n o f th e transpor t fee s an d por t charge s represent s th e 1 0 pe r cen t additiona l (after-sales-service ) fe e applicabl e t o th e shipment . Thi s i s notwithstandin g tha t ther e i s a sligh t discrepanc y betwee n th e amoun t recorde d her e an d th e AWB' s ow n calculatio n o f thi s par t o f th e tota l amoun t payable.® ®

Distributio n o f th e inlan d transpor t fee s collecte d i n respec t o f thi s

shipmen t

O f th e fund s transferre d b y Ali a t o th e ISCW T (Iraq i Ministr y o f Transport ) fro m th e inlan d transportatio n fee s tha t i t receive d fro m AW B i n respec t o f th e shipmen t o f whea t t o Ira q o n th e Bei Hai a tota l o f US$2,247,210.9 3 wa s distribute d betwee n th e variou s department s an d agencie s o f th e forme r Governmen t o f Ira q an d i n th e amount s identifie d i n Tabl e 25.2 .

Jus t ove r US$1. 5 millio n o r approximatel y tw o third s o f th e inlan d transportatio n fggg8 9 collecte d fro m Ali a i n respec t o f thi s shipmen t wa s allocate d t o th e Iraq i Ministr y o f Finance . Thi s i s approximatel y equivalen t t o US$3 5 pe r tonn e shipped .

Th e purpose(s ) t o whic h th e Ministr y applie d thos e fund s tha t i t receive d i s no t disclose d o n th e evidenc e befor e thi s Inquiry .

A mer e 1 8 pe r cen t o f th e tota l amoun t collecte d fro m Ali a a s inlan d transportatio n fee s fo r thi s shipmen t wa s distribute d t o 'land' , presumabl y i n respec t o f th e lan d transpor t o f th e wheat . Thi s i s equivalen t t o approximatel y US$9.7 5 pe r tonne . Jus t ove r 4 pe r cen t wa s allocate d t o th e port s company .

2 8 0 Report of the OU-for-Food I n q u i r í /

Table 25.2 Distribution of the inland transportation fees collected from Alia in respect of the shipment of wheat on board the Bei Hai

Recipient

Amount (US$)

Proportion of fees paid for this shipment (%)

Amount paid to ports 90,455.16 4.03

Amount paid to water 26,250.01 1.17

Amount paid to water: 25% marine agencies 5,49242 0.24

24,001.60 1.06

Amount paid to land 407,048.22 18.11

Amount paid to railroad (Nil) -

Illegible 47,607.97 2.12

Amount paid to grains Co. 71,411.97 3.18

Services and Correspondence 47,607.98 2.12

Shortage amount/Packaged (Nil) -

Amount paid to the Ministry of Finance *additional 526,715.01 23.44

Amount paid to the Ministry of Finance *service 976,816.93 4347

Amount paid to al-wataniya insurance 23,803.66 1.06

Total 2,247,210.93 100.00

Source: Exhibit 80 (UNO.0003.4875)

UNO.0001.0083 (Exhibit 81)

Summary

UNO.0001.0083 (IIC-ARC-000081) within Exhibit 81 is the 'MOU goods transport form' for another shipment of Australian wheat shipped by AWB to Iraq in 2002. This shipment was discharged in Umm Qasr in late May / early June 2002. This document

records the collection of US$2,695,519.85 from Alia in respect of that shipment and the subsequent distribution of those funds as between various departments and agencies of the then government of Iraq.

The shipment that is referred to in UNO.0001.0083 within Exhibit 81 was another shipment by AWB under its contract A1112 with the IGB. On 15 May 2002, AWB paid to Alia inland transportation fees of ¨2,786,563.49 in respect of this shipment. This was part of a transfer of ¨3,202,529.09 that AWB instructed its bank to make to Alia's euro account on 15 May 2002.^" These fees were deposited into Alia's euro account with the Jordan National Bank on 19 May 2002.^1

From the inland transportation fees it had received in respect of this shipment. Alia transferred ¨2,779,592^2 to the ISCWT (Iraqi Ministry of Transport).This was after deduction of approximately ¨6,967, being Alia's commission of 0.25 per cent of the inland transportation fees that it r e c e i v e d . ^^

Report of the Oil-for-Footi Inquiri/ 281

O f th e amoun t tha t th e ISCW T (Iraq i Ministr y o f Transport ) collecte d fro m Ali a i n respec t o f thi s shipmen t (namel y US$2,695,519.85)^ 5 ^ tQ^a l o f US$2,554,616.5 9 wa s distribute d betwee n th e variou s department s an d agencie s o f th e the n governmen t o f Ira q an d i n th e amount s identifie d i n UNO.0001.008 3 withi n Exhibi t 8 1 an d repeate d i n Tabl e 25.3 .

Th e shipmen t

Accordin g t o UNO.0001.008 3 i n Exhibi t 8 1 th e shipmen t referre d t o i n tha t documen t wa s a shipmen t o f Australia n whea t b y AW B unde r phas e X I o f th e Oil-for-Foo d Programme . I n particula r i t wa s pursuan t t o Unite d Nation s approva l (Comm )

numbe r (1100013) . A s previousl y note d i n th e contex t o f Exhibi t 80 , thi s wa s th e Unite d Nation s approva l numbe r fo r AWB' s contrac t A111 2 date d 2 0 Decembe r 2001 .

Th e vesse l name d i n UNO.0001.0083^" ^ wa s th e vesse l use d b y AW B fo r th e carriag e o f it s fourt h shipmen t o f whea t t o Ira q unde r contrac t A1112 .

AW B sough t permissio n fro m DFA T fo r th e expor t o f whea t o n thi s vesse l unde r contrac t A111 2 o n 1 1 Apri l 2002.'^' ^ Tha t permissio n wa s provide d unde r cove r o f a facsimil e fro m DFA T t o AW B late r tha t sam e day.^ ® Th e vesse l complete d loadin g o n o r abou t 2 3 Apri l 2002.^ ^ Th e quantit y o f whea t recorde d i n th e bil l o f ladin g a s havin g bee n loade d o n boar d th e vesse l accord s wit h th e quantit y o f th e 'shi p load ' recorde d o n UNO.0001.008 3 i n Exhibi t Sl.^ »

Inlan d transportatio n fee s

Th e 'Tota l Collected ' fro m Ali a a s recorde d i n UNO.0001.008 3 i n Exhibi t 8 1 wa s US$2,695,519.85 . Th e followin g 'Comments ' relevan t t o th e calculatio n o f tha t amoun t als o appeare d i n th e lowe r mos t bo x a t th e foo t o f tha t document :

Comments : (1 ) T r a n s p o r t fees : 2,779,592.0 0 Eur o = 2,686,204.2 4 US D 2 0 3 4 0 / 2 1 / 8 fo r illegible charg e 684.3 9 (2 ) Servic e charges : Signe d Illegible 15/10.1' "

Th e inlan d transportatio n fees^^ ^ payabl e i n respec t o f shipment s unde r contrac t A111 2 wa s €55.4 0 pe r t o n n e . ( T h ecomponent s o f t h i s fe e hav e alread y bee n note d i n th e contex t o f Exhibi t 80) .

B y facsimil e date d 1 5 Ma y 200 2 AW B instructe d it s bankio 4 t o transfe r €3,202,529.0 9 fro m AWB' s eur o accoun t t o Ali a (o r mor e particularl y t o Alia' s accoun t a t th e Jorda n Nationa l Bank).io 5

O f tha t amount , €2,786,563.4 9 wa s paymen t o f 10 0 pe r cen t o f th e inlan d

transportatio n fee s payabl e fo r th e shipmen t referre d t o i n UNO.0001.008 3 o f Exhibi t g] ^ 10 6 Th e balanc e o f th e fund s transferre d wa s paymen t o f inlan d transportatio n fee s

2 8 2 Report of the Oil-for-Food l i i qiiiri /

fo r anothe r shipmen t b y AW B unde r contrac t Allll.lo ^ ji-^j g ^h e shipmen t referre d t o i n UNO.0003.485 6 i n Exhibi t 8 1 whic h i s discusse d late r i n thi s appendix .

Detail s o f th e tw o shipment s makin g u p thi s transfe r ar e se t ou t i n AWB' s interna l 'Eur o Paymen t Request ' issue d b y AWB' s Internationa l Marketin g — Middl e Eas t Des k authorisin g thi s transfer . ^

Th e ban k statemen t fo r AWB' s eur o accoun t confirm s tha t €3,202,529.0 9 wa s transferre d fro m thi s accoun t o n 1 5 Ma y 2002 , i n accordanc e wit h AWB' s

instructions .

Pag e llC-ARC-10057 0 withi n Exhibi t 948 , bein g pag e 1096 2 o f th e ban k statement s fo r Aba' s eur o accoun t wit h th e Jorda n Nationa l Bank , record s th e deposi t o f

€3,202,521.09 0 int o tha t accoun t o n 1 9 Ma y 2002." «

Thi s woul d appea r t o b e th e deposi t o f th e €3,202,529.0 9 tha t AW B instructe d it s ban k t o transfe r t o Ali a o n 1 5 Ma y 2002 . Althoug h ther e i s a sligh t differenc e (namel y €8 ) betwee n th e amoun t tha t AW B instructe d it s ban k t o remi t t o Ali a o n 1 5 Ma y 2002i n (bein g th e sam e amoun t tha t wa s pai d fro m AWB' s eur o accoun t tha t dayii^ ) an d th e amoun t tha t i s recorde d o n pag e llC-ARC-10057 0 a s havin g bee n deposite d int o Alia' s eur o accoun t o n 1 9 Ma y 2002" ^ thi s i s likel y t o b e th e resul t o f ban k fee s o r simila r ban k charge s havin g bee n deducte d fro m th e amoun t remitte d b y AW B b y th e

recipien t ban k o f a n intermediar y bank.^' i

O n 2 0 Ma y 2002 , Ali a sen t a n emai l t o M r Edmonds-Wilso n advising :

W e h a v e receive d th e followin g a m o u n t , k i n d l y sen d u s th e details : 320252 1 Euro . 'i ^

Thi s inquir y appear s t o hav e bee n directe d a t th e deposi t o f €3,202,521.09 0 int o Alia' s eur o accoun t th e precedin g day .

M r Edmonds-Wilso n replie d b y emai l o n 2 1 Ma y 2002 , advisin g tha t ' The amount of EUR3,202,529.09' represente d 10 0 pe r cen t o f th e inlan d transportatio n fee s payabl e fo r th e shipmen t unde r contrac t A111 2 referre d t o i n UNO.0001.008 3 o f Exhibi t 8 1 an d a n additiona l amoun t fo r th e shipmen t unde r contrac t A l l l i n ^ (whic h i s th e shipmen t referre d t o i n UNO.0003.485 6 o f Exhibi t 8 1 an d examine d late r i n thi s appendix) .

O n 2 1 Ma y 2002 , Ali a sen t a lette r t o 'Th e Stat e Co . fo r Wate r Transpor t - Basra' . Th e headin g referre d t o th e nam e o f th e vesse l identifie d i n UNO.0001.008 3 i n Exhibi t 81 .

Th e lette r read :

W e w o u l d lik e t o i n f o r m yo u tha t w e h a v e receive d th e (2,786,55 9 Euros ) f r o m th e

A u s t r a l i a n Boar d fo r th e a b o v e m e n t i o n e d s h i p ' s load , pleas e tak e not e o f that , fo r necessar y action .

Th e amoun t o f th e inlan d transportatio n fee s tha t Ali a acknowledge d i n thi s lette r a s havin g receive d fro m AW B i n respec t o f thi s shipmen t (namel y €2,786,559 ) i s almos t identica l t o th e amoun t o f th e inlan d transportatio n fee s tha t AW B pai d i n respec t o f

Report of the Oil-for-Food Incjuiry 2 8 3

that same shipment (namely ¨2,786,563.49).iiÆ The difference between these two

a m o u n ts of ¨4 is one half of the ¨8 difference between the total a m o u nt that A WB

instructed its bank to transfer to Alia's euro account with the Jordan National Bank on

15 May 2002"'' and the a m o u nt that is recorded as having been received in Alia's euro

account with the Jordan National Bank on 19 M ay 2002 in respect of that t r a n s f e r, i^o

That there is this difference of ¨4 is consistent with the ¨8 difference having been

apportioned equally between the t wo shipments w h o se inland transportation fees

m a ke up the a m o u nt that A WB h ad transferred to Alia.

The a m o u nt of the 'Transport fees' stated in the box appearing at the foot of

UNO.0001.0083 in Exhibit 81 w as ¨2,779,592. The difference between that a m o u nt and

the a m o u nt paid by A WB in respect of this shipment'^i is ¨6,971.49. This is

approximately 0.25 per cent (or one quarter of one per cent) of the a m o u nt paid by

A WB in respect of this vessel, consistent with Mr Al-Absi's evidence that Alia

received a nd retained 0.25 per cent of the inland transportation fees that it received

and paid onto the ISCWT as its commission.

In those circumstances, the a m o u nt of the 'Transport fees' stated in the box appearing

at the foot of UNO.0001.0083 in Exhibit 81 (namely ¨2,779,592) is the a m o u nt that Alia

transferred to the ISCWT (Iraqi Ministry of Transport) after deduction of its

commission.

The vessel a nd shipment referred to in UNO.0001.0083 of Exhibit 81 are also refered to

the table of A WB p a y m e n ts for the period f r om 1 January 2002 to 24 June 2002.^22 The

entries in the third r ow relate to this vessel.

This table records in respect of that vessel a nd shipment:

" an a m o u nt of ¨2,786,559 u n d er the c o l u mn h e a d ed 'Received Amount'. This is the

same a m o u nt that Alia advised the State C o m p a ny for Water Transport on

21 May 2002 that it h ad received f r om A WB in respect of this shipment. It also

corresponds (within approximately ¨4) to the ¨2,786,563.49 paid by A WB to Alia

in respect of this shipment as part of the f u n ds transferred on 15 May 2002.123 This

is the a m o u nt of inland transportation fees that were paid to Alia in respect of this

shipment

" an a m o u nt of ¨2,779,592 under the c o l u mn h e a d ed 'Transferred Amount'. This is

the same as the a m o u nt of 'Transport fees' recorded in the box at the foot of

UNO.0001.0083 of Exhibit 81. As has already been noted, this is the a m o u nt that

Alia transferred to the ISCWT (Iraqi Ministry of Transport) f r om the inland

transportation fees it h ad received f r om A WB in respect of this shipment after

deduction of its 0.25 per cent commission.

The difference between these two a m o u n ts in this table is ¨6,967, which is 0.25 per

cent (or one quarter of one per cent) of the inland transportation fees that Alia

received in respect of this shipment, again consistent with the evidence as the a m o u nt

Report of the Oil-for-Food Incjuiry 284

of the commission that Aha was entitled to from the inland transportation fees paid to it.

According to the information contained within the box at the foot of UNO.0001.0083 in Exhibit 81, the ¨2,779,592 transferred by Aha was equal to US$2,686,204.24. From this there was to deducted a charge of US$684.39. Although further up that document

the Total Collected Amount' is US$2,695,519.85. The reason for the discrepancy between this amount and the product of the figures in the box at the foot of

UNO.0001.0083 is not apparent on the face of that document.

Distribution of the inland transport fees collected in respect of this shipment

Of the total funds received from Aha in respect of this shipment US$2,554,616.59 was distributed between the various departments and agencies of the former government of Iraq in the amounts identified in Table 25.3.

Table 25.3 Distribution of the inland transportation fees collected from Alia in respect of the shipment of wheat referred to on page UNO.0001.0083 in Exhibit 81

Amount Proportion of fees paid

Recipient (US$) for this shipment (%)

Amount paid to ports 108,868,35 4.26

Amount paid to water 31,593.50 1.24

Amount paid to water: 25% marine agencies 6,587,98 0.28

28,744.18 1.13

Amount paid to land 489,907.56 19.18

Amount paid to railroad Amount paid to illegible 57,299.13 2.24

Amount paid to state Co. for grains 85,948,70 3.36

Services and Correspondence 57,299.13 2.24

Shortage amount/Packaged Amount paid to the Ministry of Finance *additional 489,907,56 19.18

Amount paid to the Ministry of Finance *service 1,169,830.70 45.79

Amount paid to al-wataniya insurance 28,629.80 1.12

Total 2,554,616.59 100.00

Source: Exhibit 81 (UNO.0001.0083)

The total amount distributed was US$140,903.26 less than the 'Total Collected Amount' (namely US$2,695,519.85). The reason why not all the funds collected from Alia were distributed or what happened to the US$140,903.26 is not apparent from UNO.0001.0083.

Leaving aside that difference, it can nevertheless still be seen from Table 25.3 that of the funds collected from Alia, US$1.65 million was allocated to the Iraqi Ministry of Finance. This was approximately 64 per cent of that portion of the inland

transportation fees collected from Alia in respect of this shipment which was

Report of the Oil-for-Footi Inquiri/ 2 85

distribute d an d i s equivalen t t o a littl e ove r US$3 2 pe r tonn e o f th e whea t shipped . Th e purpose(s ) t o whic h th e Ministr y o f Financ e applie d thos e fund s tha t i t receive d i s no t apparen t o n th e evidenc e befor e thi s Inquiry .

Approximatel y 1 9 pe r cen t o f thos e fund s collecte d fro m Ali a a s transpor t fee s fo r thi s shipmen t wa s allocate d t o 'land' , presumabl y i n respec t o f th e lan d transpor t o f th e wheat . Thi s amount s t o approximatel y US$9.7 5 pe r tonn e o f th e whea t shipped . Jus t ove r 4 pe r cen t o f th e tota l fund s distribute d wa s allocate d t o th e port s compan y

U N O.0003.485 6 ( Exhibi t 81 )

Summar y

UNO.0003.485 6 (IIC-ARC-004999 ) withi n Exhibi t 8 1 i s th e 'MO U good s transpor t form ' fo r a shipmen t o f Australia n whea t shippe d b y AW B t o Ira q an d whic h wa s discharge d a t Um m Qas r i n Ma y 2002 .

I t record s th e collectio n o f US$2,617,252.4 3 fro m Ali a i n respec t o f tha t shipmen t an d th e subsequen t distributio n o f thos e fund s a s betwee n variou s department s an d agencie s o f th e the n governmen t o f Iraq .

Th e shipmen t referre d t o i n UNO.0003.485 6 wa s a shipmen t b y AW B unde r it s contrac t A l l l l wit h th e 1G B date d 2 0 Decembe r 2001 . Thi s wa s als o a shipmen t unde r phas e X I o f th e Oil-for-Foo d Programme .

AW B pai d inlan d transportatio n fee s o f €2,709,424.0 8 t o Ali a i n respec t o f thi s shipment . Thes e fee s wer e pai d b y wa y o f tw o payments .

Th e firs t paymen t wa s fo r €2,293,458.4 0 an d mad e o n 1 8 Apri l 2002.^2 5 i t wa s par t o f a large r amoun t (€4,620,258.48 ) tha t AW B instructe d it s ban k t o transfe r fro m it s eur o accoun t t o Ali a o n 1 8 Apri l 2002.i2f > Th e balanc e o f th e fund s transferre d wer e th e inlan d transportatio n fee s payabl e fo r th e Bei Hai (referre d t o i n Exhibi t 8 0 an d examine d earlie r i n thi s appendix) . Th e fund s transferre d wer e deposite d int o Alia' s eur o accoun t wit h th e Jorda n Nationa l Ban k o n 2 2 Apri l 2002.^2 7

Th e secon d paymen t wa s fo r €415,965.60 .^2 8 Thi s paymen t wa s als o mad e a s par t o f a large r transfe r o f fund s (namel y €3,202,529.09 ) whic h AW B instructe d it s ban k t o mak e o n 1 5 Ma y 2002 . Th e balanc e o f thi s transfe r wa s th e inlan d transportatio n fee s payabl e i n respec t o f th e shipmen t referre d t o i n UNO.0001.008 3 i n Exhibi t 8 1

(considere d earlie r i n thi s appendix) . Thes e fund s wer e deposite d int o Alia' s eur o accoun t wit h th e Jorda n Nationa l Ban k o n 1 9 Ma y 2002.^^ ^

Th e reaso n tw o payment s wer e mad e wa s becaus e AW B ha d mad e a n erro r i n calculatin g th e amoun t o f th e firs t p a y m e n t ,

2 8 6 Report of the Oit-for-Fooii Iiiijiiirt/

Fro m th e inlan d transportatio n fee s i t receive d i n respec t o f thi s shipment . Ah a transferre d €2,287,720i^ i t o th e ISCW T (Iraq i Ministr y o f T r a n s p o r t ) . x h i s wa s afte r deductio n o f it s commissio n o f 0.2 5 pe r cent.^"' ^

O f th e amoun t tha t th e ISCW T (Ministr y o f Transport ) i s recorde d a s havin g receive d fro m Ali a i n respec t o f thi s shipmen t (namel y US$2,617,252.43 ) a tota l o f

U5$2,615,252.6 3 wa s distribute d betwee n variou s th e department s an d agencie s o f th e the n governmen t o f Ira q an d i n th e amount s identifie d i n UNO.0003.485 6 withi n Exhibi t 8 1 an d repeate d i n Tabl e 25.4 .

Th e shipmen t

Th e vesse l an d shipmen t referre d t o i n UNO.0003.485 6 i n Exhibi t 8 1 i s identifie d i n tha t documen t a s a shipmen t unde r phas e X I o f th e Oil-for-Foo d Programme .

However , unlik e th e othe r document s i n Exhibit s 8 0 an d 81 , UNO.0003.485 6 doe s no t recor d th e Unite d Nation s approva l (Comm ) numbe r o r BN P lette r o f credi t (L/C ) numbe r applicabl e t o thi s shipment . Nevertheless , i t i s apparen t fro m bot h th e nam e o f th e vesse l an d th e quantit y o f th e carg o recorde d o n UNO.0003.485 6 a s havin g bee n shippedi3 5 tha t th e shipmen t referre d t o i n UNO.0003.485 6 wa s th e firs t o f AWB' s shipment s o f whea t unde r contrac t A l l l l .

Thi s wa s a contrac t tha t AW B conclude d wit h th e IG B o n 2 0 Decembe r 200 1 unde r phas e X I o f th e Oil-for-Foo d P r o g r a m m e . I t wa s approve d b y th e Unite d Nation s unde r approva l (Comm ) numbe r 1100014.13 7

AW B sough t an d obtaine d th e permissio n o f DFA T fo r th e shipmen t o f whea t t o Ira q o n th e vesse l name d i n UNO.0003.485 6 unde r contrac t A l l l l o n 1 9 Marc h 2002.^3 8 Loadin g wa s complete d o n 3 1 Marc h 2002."'- ' Th e vesse l woul d hav e lef t Australi a fo r Ira q shortl y thereafter . Th e vesse l arrive d a t th e anchorag e (a t Um m Qasr ) o n 1 6 Ma y 200 2 an d departe d o n 3 0 Ma y 2002.'^ o Thi s wa s afte r havin g complete d th e discharg e o f he r carg o tha t day.^^ i

Inlan d transportatio n fee s

Th e inlan d transportatio n fe e payabl e i n respec t o f shipment s o f whea t unde r contrac t A l l l l wa s €56.1 7 pe r tonne.i4 2

T h i s wa s th e equivalen t o f US$48.7 7 pe r tonne , o n A W B ' s calculations.^4 3 O f thi s

US$26.5 0 pe r tonn e represente d th e transportatio n fee . Thi s wa s includin g a n allowanc e o f US$0.5 0 pe r tonn e fo r por t charges . Th e balanc e represente d th e 1 0 pe r cen t after-sales-servic e fe e applicabl e t o th e shipments .

B y facsimil e date d 1 8 Apri l 200 2 AWB' s Treasur y Operation s inshucte d it s banki4 4 t o transfe r €4,620,258,4 8 t o Ah a (o r mor e particularl y t o Alia' s nominate d accoun t wit h th e Jorda n Nationa l Bank).i4 5

Report of the Oil-for-Foot i Inquiri/ 2 8 7

Of tflis amount, ¨2,293,458.48 was said to be payment of 100 per cent of the inland transportation fees payable in respect of the shipment referred to in UNO.0003.4856 in Exhibit 8 1 . T he balance was the inland transportation fees payable by AWB in

relation to its shipment to Iraq on the Bei Hai under contract A1112'47 (which was the shipment referred to in Exhibit 80 and which has already been discussed in some detail in that context earlier in this appendix).

Details of the two shipments making up this transfer of ¨4,620,258.48 are set out in A W B 's internal 'Euro Payment Request' authorising these payments.

The bank statements for AWB's euro account confirm the payment from that account of ¨4,620,258.48 on 19 April 2002, consistent with its above instruction.

There is recorded on page IlC-ARC-100567 of Ex 948, being page 10959 of the bank statements for Alia's euro account with the Jordan National Bank, the deposit of ¨4,620,250.480 into that account on 22 April 2002.i^o

This would appear to be the deposit of AWB's transfer of ¨4,620,258.48 on 19 April 2002. Although there is a sUght difference (namely ¨8) between the amount that AWB instructed it bank to remit to Alia^^i (being the same amount that was paid from AWB's euro account'^^^ and the amount that is recorded on page IIC-ARC-100567 as having been deposited into Alia's euro account'^a, this is likely to be the result of bank fees or similar bank charges having been deducted from the amount transferred by AWB by the recipient bank or an intermediary b a n k . ' " 54

On 23 April 2002 Alia sent an email to Mr Edmonds-Wilson at AWB inquiring:

Would you be kind to send us the details of this amount: 4620250 Euro'^'

This inquiry appears to have been directed at this deposit of ¨4,620,250.480 into Alia's euro account the preceding day.

On 24 April 2002 Mr Edmonds-Wilson replied by email to Alia advising that the amount was 100 per cent of the inland transportation payments for both the Bei Hat shipment and the vessel and shipment referred to in UNO.0003.4856 in Exhibit 81.1^6

Although the payment made by AWB on 19 April 2002 in respect of this shipment under its contract A l l ll was intended to be payment in full of the inland

transportation fees payable in respect of that shipment, it appears that AWB had made an error in its calculation of the amount due. The amount that should have been paid was ¨2,709,424.08. The amount in fact paid as part of the transfer of 19 April 2002 was ¨2,293,448.98. The shortfall was ¨415,965.60.

On 6 May 2002 Alia sent a message to 'The state co. for Water Transport * B a s r a ' Ji was headed by reference to the vessel referred to on UNO.0003.4856 and read:

2 88 lieport of the OU-for-Fooii Inqiiirt/

w e w o u l d lik e t o i n f o r m yo u tha t w e receive d th e A m o u n t (229345 4 Euro ) f r o m th e

Australia n Boar d fo r th e a b o v e - m e n t i o n e d s h i p loa d o f Australia n w h e a t pleas e n o t e a n d tak e th e necessar y action. '^ s

Th e amoun t tha t Ali a acknowledge d i n thi s messag e a s havin g receive d fro m AW B (namel y €2,293,454 ) i s almos t identica l t o th e amoun t o f th e inlan d transportatio n fee s tha t AW B pai d t o Ali a i n respec t o f thi s shipmen t a s par t o f th e transfe r o n

1 9 Apri l 200 2 (namel y €2,293,458.48) . Th e differenc e o f € 4 i s hal f th e differenc e o f € 8 betwee n th e tota l amoun t tha t AW B instructe d it s ban k t o transfe r t o Ali a o n 1 9 Apri l 200 2 an d th e amoun t tha t i s recorde d a s havin g bee n deposite d int o Alia' s eur o accoun t wit h th e Nationa l Ban k o f Jorda n o n 2 2 Apri l 2 0 0 2 . T h i s € 4 differenc e

i n relatio n t o thi s particula r shipmen t i s consisten t wit h th e € 8 differenc e applicabl e t o th e whol e transfe r havin g bee n apportione d equall y betwee n th e tw o shipment s whos e inlan d transportatio n fee s mad e u p th e tota l amoun t transferre d b y AW B o n tha t occasion .

O n 7 Ma y 2002 , Ali a sen t a n emai l t o AW B advising :

Kindl y b e i n f o r m e d tha t w e h a v e (2293457Euro ) f o r th e carg o loade d o n th e a / m vessel , & w e w e r e i n f o r m e d b y th e Marin e Agencie s t h a t th e a m o u n t t o b e pai d i s (270942Euro ) ... .

Yo u ar e kindl y requeste d t o remi t th e differenc e o f (415970Euro ) t o o u r accoun t t o enabl e u s n o t i f y i n g th e M a r i n e Agencie s t o avoi d an y delay .

Th e amoun t tha t Ali a acknowledge d i n thi s emai l havin g receive d i s € 1 les s tha n th e amoun t i n fac t pai d b y AW B an d € 3 mor e tha n i t acknowledge d t o th e ISCW T i n it s correspondenc e o f 6 Ma y 200 2 a s havin g receive d i n respec t o f thi s s h i p m e n t .

M r Edmonds-Wilso n replie d t o Alia' s emai l o f 7 Ma y 200 2 late r tha t sam e day , acknowledgin g th e erro r i n th e calculatio n o f th e inlan d transportatio n fee s tha t ha d bee n pai d i n respec t o f thi s shipment . H e wrote :

I n referenc e t o th e [vesse l n a m e deleted] , m y apologies , I wil l a d j u s t th e p a y m e n t (a n additiona l EUR415,965.60 ) a n d remi t wit h th e nex t vesse l p a y m e n t . Pleas e i n f o r m th e M a r i n e A g e n c i e s t o avoi d an y delay. '6 2

Thi s furthe r paymen t wa s mad e o n 1 5 Ma y 200 2 whe n AW B instructe d it s bank^^ ^ t o transfe r a furthe r €3,202,529.0 9 fro m it s eur o accoun t t o Ali a (o r mor e particularl y t o Alia' s nominate d accoun t wit h th e Jorda n Nationa l B a n k ) . 1 6 4

O f th e amoun t transferred , €415,965.6 0 wa s th e additiona l inlan d transportatio n fee s du e o n th e shipmen t unde r contrac t A l l l l whic h i s referre d t o i n U N O . 0 0 0 3 . 4 8 5 6 . i 6 5 Thi s amoun t wa s i n accordanc e wit h th e amoun t foreshadowe d i n M r Edmonds -Wilson' s emai l o f 7 Ma y 2002.1^ 6 (Ther e appear s t o b e a n explanatio n fo r thi s paymen t o n th e cop y o f AWB' s interna l 'Eur o Paymen t Request ' an d whils t i t i s fo r th e mos t

par t illegibl e i t doe s appea r t o confir m tha t th e tota l amoun t tha t shoul d hav e bee n pai d i n respec t o f thi s shipmen t wa s € 2 , 7 0 9 , 4 2 4 . 0 8 . 1 6 7 Tha t thi s wa s th e tota l amoun t du e i s als o confirme d b y th e amoun t recorde d i n th e 'Shipmen t Advic e details ' i n UNO.0003.4872-4873) .

Report of the O i l - f o r - F o o t i Inquiri/ 2 8 9

Th e balanc e o f th e fund s transferre d b y AW B o n 1 5 Ma y 200 2 wa s paymen t o f 10 0 pe r cen t o f th e inlan d transportatio n fees''' ® i n respec t o f a shipmen t unde r contrac t A1112 , bein g th e sam e shipmen t referre d t o i n UNO.0001.008 3 i n Exhibi t 8 1 (an d considere d

earlie r i n thi s appendix) .

Th e ban k statement s fo r AWB' s eur o accoun t confir m th e paymen t fro m tha t accoun t o f €3,202,529.0 9 o n 1 5 Ma y 200 2 i n accordanc e wit h AWB' s abov e i n s t r u c t i o n . i ®

Ther e i s recorde d o n pag e IIC-ARC-10057 0 o f E x 948 , bein g pag e 1096 2 o f th e ban k statement s fo r Alia' s eur o accoun t wit h th e Jorda n Nationa l Bank , th e deposi t o f €3,202,521.09 0 int o tha t accoun t o n 1 9 Ma y 2002.i7 o

Thi s woul d appea r t o b e th e deposi t o f AWB' s transfe r o f €3,202,529.0 9 mad e o n 1 5 Ma y 2002 . Althoug h ther e i s a sligh t differenc e (namel y €8 ) betwee n th e amoun t tha t AW B instructe d i t ban k t o remi t t o Aha^^ i (bein g th e sam e amoun t tha t wa s pai d fro m AWB' s eur o account'72 ) th e amoun t tha t i s recorde d o n pag e IIC-ARC -10056 7 a s havin g bee n deposite d int o Alia' s eur o account'^? , thi s i s likel y t o b e th e

resul t o f ban k fee s o r simila r ban k charge s havin g bee n deducte d fro m th e amoun t remitte d b y AW B b y th e recipien t ban k o f a n intermediar y bank.'^ ^

O n 2 0 Ma y 2002 , Ali a sen t a n emai l t o M r Edmonds-Wilso n advising : 'W e hav e receive d th e followin g amount , kindl y sen d u s th e details : 320252 1 E u r o ' . ' ^ s

Thi s inquir y b y Ali a appear s t o hav e bee n directe d a t thi s deposi t o f €3,202,521.09 0 int o Alia' s eur o accoun t th e precedin g day .

M r Edmonds-Wilso n replie d i n a n emai l o n 2 1 Ma y 2002 , advisin g tha t ' The amount of EUR3,202,529.09' represente d 10 0 pe r cen t o f th e inlan d transportatio n fee s payabl e fo r th e shipmen t unde r contrac t A111 2 o n th e vesse l name d i n UNO.0001.008 3 an d th e additiona l amoun t owin g fo r th e shipmen t unde r contrac t A l l l l referre d t o i n UNO.0003.485 6 i n Exhibi t 81.1^ 6

O n 2 1 Ma y 200 2 Ali a sen t a messag e t o th e 'Stat e co . fo r Wate r T r a n s p o r t — B a s r a ' ^ ^ " .

Th e headin g referre d t o th e vesse l identifie d i n UNO.0003.485 6 i n Exhibi t 81 . Th e messag e read :

W e w o u l d lik e t o i n f o r m y o u th¿^ t w e receive d th e A m o u n t (415,96 1 Euro ) f r o m t h e

Australia n Boar d a s a d i f f e r e n c e i n t r a n s p o r t a n d service s fo r th e a b o v e ship' s load , pleas e not e tha t a n d tak e t h e necessar y action .

Th e amoun t tha t Ali a acknowledge d i n thi s messag e a s havin g receive d fro m AW B (namel y €415,961 ) i s almos t equa l t o th e furthe r amoun t o f inlan d transportatio n fee ^ tha t AW B pai d t o Ali a i n respec t o f thi s shipmen t (namel y €415,965) . Th e differenc e i s (again ) €4 , whic h i s (again ) hal f o f th e differenc e (o f €8 ) betwee n th e tota l amoun t th a AW B instructe d it s ban k t o transfe r t o Ali a o n 1 5 Ma y 200 2 an d th e amoun t tha t i^ -

recorde d a s havin g bee n deposite d int o Alia' s eur o accoun t wit h th e Nationa l Ban k o f Jorda n o n 1 9 Ma y 2002^7 9 (consisten t wit h thi s € 8 differenc e havin g bee n apportione d

2 9 0 Report of the OU-for-Food Inquir í /

equally between the two shipments whose inland transportation fees made up the amount transferred by AWB on 15 May 2002).

Accordingly, through the two payments identified above, AWB paid to Alia inland transportation fees totalling ¨2,709,424.081^" ij^ respect of the shipment under contract A l l ll that is referred to in UNO.0003.4856 in Exhibit 81.

The 'received amount' of 'Transport Charges' referred to in the box at the foot of page UNO.0003.4856 in Exhibit 81 is '2709415.00 Euro'. This is within ¨10 of the total inland transportation fees paid by AWB to Alia in respect of this shipment (namely ¨2,709,424.08).

Bearing in mind that these fees were paid by AWB in two payments, this ¨9.08 discrepancy between the 'Transport Charges' referred to in UNO.0003.4856 and the amount actually paid by AWB is consistent with the difference of ¨4 between the

amount paid by AWB and the amount received by Alia that has already been

observed in relation to each of these payments.

The shipment referred fo in UNO.0003.4856 in Exhibit 81 is also referred to in the first and second rows of the table of AWB payments for the period from 1 January 2002 to 24 June 2002.1^2

This table records in respect of this vessel and shipment two amounts under each of the columns headed 'Received Amount' and 'Transferred Amount' (consistent with AWB's payment of the inland transportation fees in respect of this shipment having been paid in two tranches).

More particularly this table records in respect of this vessel and shipment:

" two amounts-namely ¨2,293,454 and ¨415,962 - totalling ¨2,709,416 under the column headed 'Received Amount'. This total accords (within ¨1) with the amount of 'Transport Charges' recorded in the box at the foot of page

UNO.0003.4856 in Exhibit 81. It is also very close to the total amount that AWB transferred to Alia (namely ¨2,709,424.08). The difference is ¨8.08, which is consistent with the observations that have already been made of there being a difference of ¨4 between the amount remitted by AWB and the amount deposited into Alia's account in relation to each of the two payments by which these inland transportation fees were paid

" two amounts-namely ¨2,287,720 and ¨414.922-totalling ¨2,702,642 under the column headed 'Transferred Amount'.

The difference between these two totals is ¨6,774. This is almost identical to the difference between the total of the two amounts under the 'Transferred Amount' column and the 'Transport Charges' of ¨2,709,415 found in the box at the foot of UNO.0003.4856 in Exhibit 81 (which is ¨6,773). This difference is also equal to 0.25 per cent (or one quarter of one per cent) of the total amount of the inland transportation

Report of the Oil-for-Food Incjuiry 2 91

fees that Aha received from AWB in respect of this shipment {consistent with the evidence before this Inquiry as to the commission that Alia was entitled to retain from the inland transportation fees paid to

Accordingly, the amount of the 'Transport Charges' referred to in the box at the foot of page UNO.0003.4856 in Exhibit 81 (namely ¨2,709,415) would seem to be the amount of the inland transportation fees received by Alia from AWB in respect of the shipment under contract Allll that is referred to in UNO.0003.4856, before the deduction or retention of Alia's commission of 0.25 per cent.

The total amount collected from Alia in respect of the shipment referred to in UNO.0003.4856 in Exhibit 81 was US$2,617,252.43. This is the amount that has been inserted in the box labelled 'Total Collected' on that document. This is (presumably) the US dollar equivalent of the funds (in euros) which Alia transferred to the ISCWT (Iraqi Ministry of Transport) from the inland transportation fees that it received from

AWB in respect of the shipment that is referred to in UNO.0003.4856 in Exhibit 81. However it is not apparent from the entries in that document how that US dollar amount was calculated. In particular, this is not readily apparent from the information contained in the box headed 'Comments' at the foot of that page.

In the table of AWB payments for the period from 1 January 2002 fo 24 June 20021^4 there are two dates recorded against the two amounts of ¨2,287,720 and ¨414.922 under the column 'Transferred Amounts' in respect of this shipment, namely 6 June 2002 and 23 June 2002 respectively. It would appear that these are the dates on which those amounts were transferred. However it has not been possible to find either of those transfers or transfers of those amounts in the copies of the bank statements for Alia's euro account in Exhibit 948. In particular it has not been possible to find a transfer of the first amount on or about 6 June 2002 within the Alia bank statements.

The bank statements for Alia's euro account with the Jordan National Bank in Exhibit 948 only go up to 16 June 2002. It is therefore not possible to verify from those statements whether there was a transfer of the second of these two amounts at or about the second date given.

Nevertheless it is apparent from UNO.0003.4856 in Exhibit 81 that funds were remitted by Alia to the ISCWT (Iraqi Ministry of Transport) from the inland transportation fees that it received from AWB in respect of the shipment referred to in that document and that those funds were distributed to those departments and agencies of the former government of Iraq listed in that document and in the amounts specified in that document (and which are repeated in Table 25.4).

In the table of AWB payments for the period from 1 January 2002 to 24 June 2 0 02 the second of the two receipts and payments recorded in respect of this shipment is

described (in the column headed 'Comments') as 'after sales service'.^^^ However this is not the way in which AWB treated its second payment to Alia. Nor was the second payment a payment of after-sales-service fees.

Report of the Oil-for-Footi Inquiri/ 292

As has already been noted, AWB's second payment was made as a consequence of its error in calculating the amount of the inland transportation fees due in respect of this shipment at the time it made the first payment. Furthermore, as the after-sales-service fee payable in respect of this shipment was calculated on 10 per cent of the value of the CIF FIT price of the cargo, the amount of the after-sales-service fee applicable to the shipment referred to in UNO.0003.4856 in Exhibit 81 was much greater than the amount of AWB's second payment to Aha. This is borne out by the distribuhon of the fees collected for this shipment recorded in UNO.0003.4856 (and repeated in Table 25.4). The amount allocated to the Ministry of Finance for 'service' exceeded significantly the amount of AWB's second payment.

Distribution of the inland transport fees collected in respect of this

shipment

Of the funds received from Alia in respect of the inland transportation fees that it had received from AWB in respect of the shipment referred to in UNO.0003.4856 in Exhibit 81, US$2,615,252.63 was distributed between the various departments and agencies of the then government of Iraq in the amounts identified in Table 25.4.

Table 25.4 Distribution of the inland transportation fees collected from Alia in respect of the shipment of wheat referred to on page UNO.0003.4856 in Exhibit 81

Amount Proportion of fees paid

Recipient (US$) for this shipment

Amount paid to ports 52,923.81 2.02

Amount paid to water 27,924.46 1.07

Amount paid to the Sea water: 25% 28,068.12 1.00

6,403.16 0.24

Amount paid to land 447,068.25 17.09

Amount paid to railroad 29,246.21 1.12

Amount paid to the iHegibie 111,418.54 4.26

Amount paid to Ministry of Trade 83,563.91 3.20

Services and Correspondence *trade 55,709.27 2.13

Shortage amount/Pac)

Amount paid to the Ministry of Finance *service 1,131,117,30 43.25

Amount paid to al-wataniya insurance 27,854.63 1.07

Total 2,615,252.63 100.00

Of the total amount distributed, US$1.74 million or approximately 66.8 per cent of the inland transportation fees remitted by Alia in respect of this shipment was allocated to the Iraqi Ministry of Finance. This is approximately US$35 per tonne of wheat shipped. The purpose(s) to which the Ministry of Finance applied these funds is not apparent on the evidence before this Inquiry.

Report of the Oil-for-Food Incjuiry 293

Approximately 17 per cent of the total amount collected from Alia as transport fees for this shipment was distributed to 'land', presumably in respect of the land transport of the wheat. This is equivalent to approximately US$9.10 per tonne. Just over 2 per cent of the total amount collected from Alia and distributed was allocated to the ports company.

UNO.0003.4892 (Exhibit 81)

Summary

UNO.0003.4892 (nC-ARC-005035) within Exhibit 81 is the 'MOU Goods Transport form' for a shipment of Austrahan wheat shipped by AWB to Iraq in late May 2002 and which was discharged in Umm Qasr in June 2002. This document records the collection of US$2,241,402.98 from Alia in respect of that shipment and the subsequent distribution of those funds as between various departments and agencies of the then government of Iraq.

This shipment referred to in UNO.0003.4892 was another of AWB's shipments of wheat to Iraq under its contract Allll with the 1GB. On 24 May 2002, AWB paid inland transportation fees of ¨2,317,140 to Alia in respect of that shipment.!Æ^ This was as part of a larger transfer of ¨5,220,121.61 which AWB asked its bank to pay to Alia on 24 May 2002.188 These funds were deposited into Alia's euro account with the Jordan National Bank on 27 May 2002.18?

From the inland transportation fees it had received in respect of this shipment. Alia transferred ¨2,311,343''^o to the ISCWT (Iraqi Ministry of Transport).i^i This was after deduction of approximately ¨5,793, being Alia's commission of 0.25 per cent of the inland transportation fees that it received.i''^

Following the payment of service charges of US$599.76i9^ a total of US$2,239,870.98 of the amount that the ISCWT (Ministry of Transport) had collected from Alia in respect of this shipmenti94 was distributed between the various departments and agencies of the then government of Iraq and in the amounts identified in UNO.0001.0083 within Exhibit 81 and repeated in Table 25.5.

The shipment

The shipment referred to in UNO.0003.4892 in Exhibit 81 is recorded as being a shipment under both phase XI of the Oil-for-Food Programme and United Nations approval (Comm) number (1100014). As previously observed, this was the United Nations approval number for AWB contract Allll dated 20 December 2001.

The vessel named in UNO.0003.4892 in Exhibit 811^^ ^^g the vessel used for the carriage of AWB's second shipment of wheat to Iraq under contract Allll.

Report of the Oil-for-Food Incjuiry 294

AW B sough t permissio n fro m DFA T fo r th e expor t o f whea t o n thi s vesse l unde r contrac t A l l l l o n 2 2 Apri l 2002.'^' ^ Tha t permissio n wa s grante d b y DFA T late r tha t sam e day.i^ ^ -p^ e quantit y o f whea t recorde d i n th e bil l o f ladin g a s havin g bee n

shippe d o n boar d thi s vessel''' ® accord s wit h th e firs t figur e give n fo r th e ship' s loa d i n UNO,0003.489 2 i n Exhibi t 8 1 . L o a d i n g o f th e carg o o n th e vesse l wa s complete d b y abou t 5 Ma y 2002. ™ Th e vesse l woul d hav e lef t Australi a fo r Ira q shortl y therafter .

Th e vesse l anchore d of f Ira q o n 1 Jun e 200 2 an d departe d Um m Qas r o n

2 1 Jun e 2002.20 1 Thi s wa s afte r i t ha d complete d discharg e o f it s carg o tha t day .

Inlan d transportatio n fee s

Th e inlan d transportatio n fe e payabl e i n respec t o f shipment s unde r contrac t A l l l l wa s €56.1 7 pe r tonne . Thi s wa s th e equivalen t o f US$48.7 7 pe r tomie , o n AWB' s c a l c u l a t i o n s . A breakdow n o f th e element s makin g u p thi s amoun t ha s alread y bee n

note d earlie r i n thi s appendix .

B y facsimil e date d 2 4 Ma y 200 2 AWB' s Treasur y Operation s instructe d it s bank^o- i t o transfe r €5,220,121.6 1 t o Ali a (o r mor e particularl y t o Alia' s nominate d accoun t wit h th e Jorda n Nationa l Bank).^" ^

O f th e amoun t t o b e transferred , €2,317,140.0 0 wa s paymen t o f 10 0 pe r cen t o f th e inlan d transportatio n fee s payabl e fo r th e shipmen t referre d t o i n UNO,0003.489 2 i n Exhibi t 81.2<' 6 Th e balanc e wa s paymen t o f inlan d transportatio n fee s i n respec t o f anothe r o f AWB' s shipment s t o Ira q unde r contrac t A1112.20 7

Detail s o f th e tw o shipment s comprisin g thi s transfe r o f €5,220,121.6 1 ar e se t ou t i n AWB' s interna l 'Eur o Paymen t Request ' authorisin g thes e payments-^" ®

Th e ban k statement s fo r AWB' s eur o accoun t confir m tha t €5,220,121.6 1 wa s pai d fro m tha t accoun t o n 2 4 Ma y 200 2 consisten t wit h AWB' s abov e i n s t r u c t i o n . ^ o ^ Thi s transfe r appear s t o hav e bee n funde d b y th e deposi t int o AWB' s eur o accoun t th e ver y sam e da y o f a foreig n exchang e receip t o f exactl y th e sam e amoun t a s th e amoun t transferre d t o Ali a (namel y €5,220,121.61).21 0 Curiously , th e entrie s fo r bot h tha t deposi t an d th e transfe r t o Ali a ar e recorde d i n AWB' s ban k statemen t agains t th e nam e o f AW B Financ e Limited.21 1 Presumabl y th e deposi t o f thes e fund s int o AWB' s eur o accoun t wa s th e resul t o f a U S dolla r currenc y swa p o r exchange , mad e i n orde r fo r AW B t o obtai n th e euro s necessar y t o mak e th e paymen t t o Alia .

Ther e i s recorde d o n pag e llC-ARC-10057 1 o f Exhibi t 948 , bein g pag e 1096 3 o f th e ban k statement s fo r Alia' s eur o accoun t wit h th e Jorda n Nationa l Bank , th e deposi t o f €5,220,113.61 0 int o tha t accoun t o n 2 7 Ma y 2OO2.21 2

Thi s woul d appea r t o b e th e deposi t o f AWB' s paymen t o f €5,220,121.6 1 o f 2 4 Ma y 2002 . Althoug h ther e i s a sligh t differenc e (namel y €8 ) betwee n th e amoun t tha t AW B instructe d i t ban k t o remi t t o Alia2i 3 (bein g th e sam e amoun t tha t wa s pai d

Report of the Oil-for-Food Incjuiry 295

from AWB's euro account^i-*) and the amount that is recorded on page IIC-ARC-100571 as having been deposited into Alia's euro account^is^ this is likely to be the result of bank fees or similar bank charges having been deducted from the amount remitted by AWB by the recipient bank or an intermediary bank.^i^

On 27 May 2002 the ISCWT sent a facsimile to Alia in relation to the shipment referred to in UNO.0003.4892 within Exhibit 81 requesting payment of ¨2,317,140 (being the inland transportation fees for that shipment).There appears towards the end of this facsimile the following:

CC: MRS: A.W.B.

KINDLY COORDINATE WITH 'MRS' ATIA AT AMMAN CO ON FAX NO

On 27 May 2002, Aha sent an email to Mr Edmonds-Wilson advising:

We have received the following amount, kindly send us the details: 522011 SEuro.^'f

This inquiry by Aha appears to have been directed at this deposit of ¨5,220,113.61 which the bank statements for Aha's euro account record having been made into that account that day.

Mr Edmonds-Wilson replied to this inquiry the next day (28 May 2002) in an email timed at 8:45 am, by referring Alia to an email that he had sent to them earlier that morning.220 This would seem to be a reference to the email that Mr Edmonds-Wilson sent to Alia two minutes earlier that morning (at 8:43 am) advising it that ¨5,220,121.51 had been remitted on 24 May 2002 and identifying the two shipments to

which that payment related and the amount of the payment made in respect of each shipment. One of those two shipments identified was the shipment referred to in UNO.0003.4892 in Exhibit 81.

On 29 May 2002 Alia sent a message to 'The state Co. for Water Transport *Basra'.221 The heading referred to the vessel referred to on page UNO.0003.4892 in Exhibit 81. The message read:

We would like to inform you that we received an Amount (2,317,136 Euros) from the

Australian Board for the transport and service fees for the aliove mentioned ship loaded with Australian whet, please note and take necessary action.

The amount that Aha acknowledged in this message as having received from AWB (namely ¨2,317,136) is almost identical to the amount of inland transportation fees thai AWB paid to Alia in respect of this shipment (namely ¨2,317,140). The difference of ¨4 is half the difference of ¨8 between the total amount that AWB instructed its bank ti^ transfer to Alia on 24 May 2002 and the amount that is recorded as having been deposited into Alia's euro account with the National Bank of Jordan on 27 May 2002 The ¨4 difference in relation to the payment made in respect of this particular shipment is consistent with the ¨8 difference applicable to the overall transfer having

Report of the Oil-for-Footi Inquiri/ 296

been apportioned equally between the two shipments whose inland transportation

fees made up that transfer.

The vessel and shipment referred to in UNO.0003.4892 in Exhibit 81 is also referred to in the fourth row of the table of AWB payments for the period from 1 January 2002 to 24 June 2002 which the United Nations produced to this Inquiry.^

This table records in respect of that vessel and shipment:

" an amount of ¨2,317,136 under the column headed 'Received A m o u n t ' . T h is is

equal to the amount that Aha stated in its message to the ISCWT on 29 May 2002 that it had received from AWB in respect of this shipment. This also corresponds (within ¨4) to the ¨2,317,140 that AWB paid to Alia in respect of the inland transportation fees for this shipment. 225

" an amount of ¨2,311,343 under the column headed 'Transferred A m o u n t ' . 2 26 This is the amount of the inland transportation fees that Alia received from AWB in respect of the shipment referred to in UNO.0003.4892 which it transferred to the ISCWT (Iraqi Ministry of Transport). From the date in the fifth column of the table, it appears that this transfer was made on 24 June 2002.22^

The difference between these two amounts is ¨5,793, which is 0.25 per cent (or one quarter of one per cent) of the total amount that Alia received in respect of this shipment (consistent with Mr AI-Absi's evidence as to the commission that Alia was paid for receiving inland transportation fees for transfer to the I S C W T ) . 2 2ª

The amount of the 'Transport Charges' stated in the box appearing at the foot of UNO.0003.4892 in Exhibit 81 is '231342 Euro'.229 This would appear to be a typographical error and should read ¨2,311,342, which would be within ¨1 of the amount transferred by Alia in respect of this shipment as recorded in the table headed

'Australian Wheat Board p a y m e n t s ' . 2 ^0 If that is so, the amount of the 'Transport Charges' specified in the box at the foot of UNO.0003.4892 would be the amount that Alia had transferred to the ISCWT (Iraqi Ministry of Transport) from the inland transportation fees that it had received for this shipment from AWB after deduction of its commission of 0.25 per cent.23i

The complete entry for the box at the foot of UNO.0003.4892 reads:

Comments: (1) Transport Charges: 231342 Euros on 24/6 = 2,242,002.71 = 20320/8/26 12/10 [Signature] (2) Service charges: [illegible] $599.76 12/102^2

The first line suggests that the ¨2,311,342 transferred by Alia when converted into US dollars (on 24 June 2002)233 yielded an amount of US$2,242,002.71. From this, service fees of US$599.76 were then deducted to give US$2,241,402.95. This is also the 'Total

collected amount' specified to in the middle of UNO.0003.4892 (within 3 cents). This amount of US$2,241,402.98 therefore represents the amount which the ISCWT (Iraqi

Report of the Oil-for-Food I n c j u i ry 2 97

Ministr y o f Transport ) collecte d fro m Ali a fro m th e inlan d transportatio n fee s tha t Ali a receive d fro m AW B i n respec t o f th e shipmen t referre d t o i n UNO.0003.489 2 an d afte r deductio n o f bot h Alia' s commissio n an d 'Servic e charges' .

Ther e i s n o recor d withi n an y o f th e ban k statement s fo r Alia' s eur o accoun t withi n Exhibi t 94 8 o f th e transfe r o r €2,311,343 . If , a s som e o f th e document s suggest . Ali a transferre d thes e fund s o n 2 4 Jun e 2002 , i t i s no t possibl e t o verif y whethe r tha t transfe r wa s mad e b y referenc e t o Exhibi t 948 . Tha t i s becaus e Exhibi t 94 8 doe s no t contai n an y ban k statement s fo r Alia' s eur o accoun t wit h th e Jorda n Nationa l Ban k beyon d 1 6 Jun e 2002.^3 4 Ther e ar e als o n o othe r entrie s i n thos e ban k statement s fo r

Alia' s eur o accoun t tha t ar e include d i n Exhibi t 94 8 an d tha t hav e bee n translate d whic h ca n b e linke d t o Alia' s remittanc e o f th e inlan d transportatio n fee s tha t i t receive d fro m AW B i n respec t o f thi s shipment .

Distributio n o f th e inlan d transpor t fee s collecte d i n respec t o f thi s

shipmen t

O f th e US$2,241,402.9 8 collecte d fro m Ali a fro m th e inlan d transportatio n fee s whic h i t receive d i n respec t o f th e shipmen t referre d t o i n UNO.0003.489 2 i n Exhibi t 81 , US$2,239,870.9 8 wa s subsequentl y distribute d betwee n th e variou s department s an d agencie s o f th e the n governmen t o f Ira q i n th e manne r an d amount s identifie d i n

Tabl e 25.5 .

Approximatel y US$1.4 8 millio n o r a littl e ove r 6 6 pe r cen t o f th e inlan d transpor t fee s collecte d fro m Ali a i n respec t o f thi s shipmen t wa s allocate d t o th e Iraq i Ministr y o f Finance . Thi s i s th e equivalen t o f approximatel y US$35.5 0 pe r tonn e o f th e whea t shipped . Th e purpose(s ) t o whic h th e Ministr y o f Financ e applie d thos e fund s i s no t

apparen t o n th e evidenc e befor e thi s Inquiry .

Approximatel y 1 8 pe r cen t o f th e tota l amoun t collecte d fro m Ali a a s inlan d transportatio n fee s fo r thi s shipmen t wa s distribute d t o 'land' , presumabl y i n respec t o f th e lan d transpor t o f th e wheat . Thi s i s th e equivalen t o f approximatel y US$9.7 5 pe r tonne . Jus t ove r 4 pe r cen t wa s allocate d t o th e port s company .

U N O.0003.494 9 ( Exhibi t 81 )

Summar y

UNO.0003.494 9 (IlC-ARC-005092 ) withi n Exhibi t 8 1 i s th e 'MO U Good s Transpor l for m fo r a shipmen t o f Australia n whea t shippe d b y AW B t o Ira q an d discharge d i i Um m Qas r i n lat e Octobe r / earl y Novembe r 2002 . I t record s th e collectio n o ' US$2,211,176.4 6 fro m Ah a i n respec t o f tha t shipmen t an d th e subsequen t distributio r o f thos e fund s a s betwee n variou s department s an d agencie s o f th e the n governmen t o f Iraq .

2 9 8 Report of the OU-for-Food Inquir í /

Table 25.5 Distribution of the inland transportation fees collected from Alia in respect of the shipment of wheat referred to on page UNO.0003.4892 in Exhibit 81

Amount Proportion of fees paid

Recipient (US$) for this shipment

Amount paid to ports 90,912.56 4.06

Amount paid to water 26,382.75 1.18

Amount paid to the water: 25% 14,004.31 0.63

5,475.54 0.24

Amount paid to land 409,106.54 18.26

Amount paid lo railroad Illegible 47,828.72 2.14

Amount paid to state Co. for grains 71,773.08 3,20

Services and Correspondences 47,848.72 2.14

Shortage amount/Pacl

Amount paid to the Ministry of Finance *service 967,139.77 43.18

Amount paid to al-wataniya insurance 22,624.36 1.01

Total 2,239,870.98 100.00

This was another of AWB's shipments of wheat to Iraq under contract Allll dated 20 December 2001, in respect of which inland transportation fees of ¨2,649,428.91 were paid by AWB to Alia on 15 October 2002.235

From the inland transportation fees it had received from AWB in respect of this shipment. Alia transferred ¨2,642,80023" to the ISCWT (Iraqi Ministry of Transport).23? This was after deduction of approximately ¨6,624, being Alia's commission of 0.25 per cent of the inland transportation fees that it received.238

The total amount collected by the ISCWT (Iraqi Ministry of Transport) from Alia translated into US$2,211,176.46.239 j^g whole of this amount was distributed between the various departments and agencies of the then government of Iraq and in the amounts identified in UNO.0001.0083 within Exhibit 81 (and repeated in Table 25.6).

The shipment

The shipment referred to in UNO.0003.4849 is said within that document to have been a shipment under phase XI of the Oil-for-Food Programme and in particular under United Nations approval (Comm) number (1100014). As previously observed, this was the United Nahons approval number for AWB contract Allll dated 20 December 2001.

The vessel named in UNO.0003.4949 in Exhibit 8124ª' ^as the vessel used for the carriage of AWB's 10th shipment of wheat to Iraq under contract Allll.

AWB sought DFAT's permission for the export of wheat on this vessel under contract Allll on 11 July 2002.241 phat permission was granted by DFAT later that same

Report of the Oil-for-Food Inquirif 2 99

d a y . T h e quantit y o f whea t recorde d i n th e bil l o f lading24 3 a s havin g bee n shippe d o n boar d th e vesse l accord s wit h th e firs t figur e give n fo r th e ship' s loa d i n

UNO.0003.494 9 i n Exhibi t 81.2-t 4 Loadin g wa s complete d o n o r abou t 2 6 Jul y 2002.24 5 Th e vesse l woul d hav e lef t Australi a fo r Ira q shortl y thereafter .

Th e vesse l anchore d (of f Um m Qasr ) o n 2 2 Octobe r 200 2 an d saile d o n

1 5 Novembe r 2002--^ ^ followin g th e completio n o f th e discharg e o f it s cargo .

Inlan d transportatio n fee s

Th e inlan d transportatio n fe e payabl e i n respec t o f shipment s unde r contrac t A l l l l wa s €56.1 7 pe r tonn e (whic h wa s th e equivalen t o f US$48.7 7 pe r tonne , o n AWB' s calculations).24 " A breakdow n o f th e element s makin g u p thi s amoun t appear s earlie r i n thi s appendix .

B y facsimil e date d 1 5 Octobe r 200 2 AWB' s Treasur y Operation s instructe d it s bank24 8 t o transfe r €5,352,979.3 8 t o Ali a (o r mor e particularl y t o Alia' s nominate d accoun t wit h th e Jorda n Nationa l B a n k ) . 2 4 9

O f tha t amount , €2,649,428.9 1 wa s paymen t o f 10 0 pe r cen t o f th e inlan d

transportatio n fee s payabl e i n respec t o f th e shipmen t referre d t o i n UNO.0003.494 9 i n Exhibi t 81.25 0 j h e balanc e wa s fo r th e inlan d transportatio n fee s payabl e i n relatio n t o anothe r o f AWB' s shipment s t o Ira q unde r contrac t A 1 1 1 2 . 2 5 1

Detail s o f th e tw o shipment s comprisin g thi s transfe r ar e se t ou t i n AWB' s interna l 'Eur o Paymen t Request ' authorisin g thes e p a y m e n t s . 2 ^ 2

Th e ban k statement s fo r AWB' s eur o accoun t confir m th e paymen t fro m tha t accoun t o f €5,352,979.3 8 o n 1 5 Octobe r 200 2 i n accordanc e wit h AWB' s abov e i n s t r u c t i o n . 2 5 3 Thi s paymen t appear s t o hav e bee n funde d b y th e deposi t int o AWB' s eur o accoun t tha t sam e da y o f a foreig n exchang e receip t whic h wa s exactl y th e sam e amoun t a s th e amoun t transferre d t o A l i a . 2 5 4 Presumabl y th e fund s deposite d int o AWB' s eur o accoun t wa s tha t resul t o f a U S dolla r currenc y swa p o r exchange . I n an y event , thos e fund s wer e deposite d int o tha t accoun t i n orde r tha t AW B coul d i n tur n obtai n th e euro s necessar y t o mak e th e propose d transfe r t o Alia .

Ther e i s no t include d i n Exhibi t 94 8 an y copie s o r translation s o f ban k statement s fo r Alia' s eur o accoun t ban k i n respec t o f Octobe r 2002 . I t i s therefor e no t possibl e t o verif y fro m Exhibi t 94 8 tha t th e €5,352,979.3 8 tha t AW B instructe d it s ban k t o transfe r t o Alia' s eur o accoun t wit h th e Jorda n Nationa l Ban k o n 1 5 Octobe r 200 2 wa s

deposite d int o tha t account .

Nevertheless , ther e seem s littl e doub t fro m UNO.0003.494 9 i n Exhibi t 8 1 tha t thos e fund s wer e receive d b y Ali a an d tha t a substantia l proportio n o f the m wa s

subsequentl y transferre d b y Ali a t o th e ISCW T (Iraq i Ministr y o f Transport ) an d i n

3 0 0 Report of the Oil-for-Footi ¡nqitiiy

tur n distribute d betwee n th e variou s department s an d agencie s o f th e forme r governmen t o f Ira q i n th e manne r an d amount s identifie d i n tha t document .

O n 2 2 Octobe r 200 2 Ah a sen t a messag e t o th e 'Stat e Co . fo r Wate r Transpor t — B a s r a ' . 2 5 5 Th e headin g referre d t o th e vesse l tha t i s als o referre d t o i n UNO.0003.4949 .

Th e messag e read :

W e w o u l d lik e t o i n f o r m yo u tha t w e receive d €2,149,42 4 f r o m th e Australia n Boar d fo r th e a b o v e - m e n t i o n e d vessel' s load , pi s tak e not e o f tha t a n d tak e necessar y action .

Th e amoun t whic h Ali a acknowledge d i n thi s messag e a s havin g receive d fro m AW B (namel y €2,149,424 ) i n respec t o f thi s shipmen t doe s no t accor d wit h th e amoun t tha t AW B i n fac t pai d (namel y €2,649,428.91).25 7

Th e referenc e t o '€2,149,424 ' woul d appea r t o b e a typographica l error . Th e firs t ' T shoul d b e a '6' , i n whic h cas e th e amoun t shoul d hav e rea d '€2,649,424' . Thi s woul d coincid e (withi n €4 ) wit h th e amoun t tha t AW B pai d t o Ali a i n respec t o f thi s

shipmen t a s par t o f th e transfe r o f €5,352,979.38 , namel y €2,649,428.91 . Th e differenc e o f € 4 coul d b e readil y explaine d b y th e deductio n o f ban k fee s o r othe r charge s fro m th e amoun t remitte d i n respec t o f thi s shipmen t b y th e receivin g ban k o r a n intermediat e ban k (i n th e manne r previousl y identified) .

Thi s woul d als o coincid e wit h th e amoun t liste d fo r thi s shipmen t unde r th e colum n heade d 'Receive d Amount ' i n th e tabl e heade d '(Australia n Whea t Boar d Payment ) Schedul e o f Receive d Amount s i n Eur o Fro m 1/1/200 3 t o 19/3/2003'.2^ 8 A cop y o f bot h tha t tabl e i n Arabic25 9 an d a translatio n o f thi s tabl e wer e provide d t o thi s Inquir y b y th e Unite d Nations .

Thi s woul d als o coincid e wit h th e amoun t state d i n th e bo x appearin g a t th e foo t o f UNO.0003.494 9 i n Exhibi t 8 1 a s th e 'Amoun t received' . Th e complet e entr y fo r tha t bo x reads :

Notes : 1 ) A m o u n t receive d base d o n th e a b o v e fa x €2,649,424.0 0 fo r transpor t fee s a n d r e m a i n i n g balanc e 2 ) O u r c o m m i s s i o n i s $24011.5 0 fo r 0. 5 cent s / to n [ H a n d w r i t t e n : £2,642,80 0 i n 2870 7 / 1 2 / 2 . 2 «

I n th e tabl e entitle d '(Australia n Whea t Boar d Payment ) Schedul e o f Receive d Amount s i n Eur o Fro m 1/1/200 3 t o 19/3/2003'2^ 1 ther e i s recorde d i n respec t o f th e vesse l an d thereb y shipmen t referre d t o i n UNO.0003.4949 :

 a n amoun t o f €2,649,42 4 unde r th e colum n heade d 'Receive d Amount' . Thi s i s th e amoun t o f inlan d transportatio n fee s tha t Ali a receive d fro m AW B i n respec t o f thi s shipmen t

 a n amoun t o f €2,642,80 0 unde r th e colum n heade d 'Transferre d Amount' . Thi s i n th e amoun t tha t Ali a transferre d t o th e ISCW T (Iraq i Ministr y o f Transport ) fro m

Report of the Oil-for-Food ¡iiqiiir:/ 3 0 1

the inland transportation fees that it received from AWB in respect of this shipment.

The difference between these two amounts * namely ¨6,624 *is 0.25 per cent (or one quarter of one per cent) of the total amount of the inland transportation fees that Alia received in respect of this shipment, (consistent with the evidence of Mr Al-Absi as to the commission that Alia was paid for receiving inland transportation fees for transfer to ISCWT).

In this instance, the amount recorded in the box appearing at the foot of page UNO.0003.4949 in Exhibit 81 as being the 'Amount received' represents the amount received by Alia before the deduction of its commission of 0.25 per cent.

The amount of that commission appears to have been ¨6,624 (viz the ¨2,649,424 that Alia received from AWB less the ¨2,642,800 transferred by Alia both as recorded in both the schedule headed '(Australian Wheat Board Payment) Schedule of Received Amounts in Euro From 1/1/2003 to 19/3/2003'262 and as referred to in the last line of the entry in the box). The amount of ¨6.624 is 0.25 per cent of the amount that Alia received from AWB (namely ¨2,649,428.91).

The 'Total collected amount' recorded on page UNO.0003.4949 in Exhibit 81 is US$2,211,176.46. This is presumably the US dollar equivalent of the ¨2,642,800 referred to in the last line of the box appearing at the bottom of that page, less the commission of US$24,011.50 referred to in the immediately preceding line in that box.

It is this amount of US$2,211,175.46 that was distributed to the departments and agencies of the former government of Iraq in the manner and the amounts listed in UNO.0003.4949 (in Exhibit 81).

Distribution of the inland transport fees collected in respect of this

shipment

Page UNO,0003.4949 of Exhibit 81 records that the funds received from Alia in respect of this shipment were distributed between the various Iraqi authorities and in the amounts identified in Table 25.6.

Approximately US$1.49 million or a little over 67 per cent of the inland transport fees collected from Alia in respect of this shipment was allocated to the Iraqi Ministry of Finance. This is the equivalent of approximately US$31 per tonne of the wheat

shipped. The purpose(s) to which the Ministry of Finance applied those funds is not apparent on the material before this Inquiry.

Approximately 18.43 per cent of the total amount collected from Alia as transport fees for this shipment was distributed to 'land', presumably in respect of the land transport of the wheat. This is equivalent to approximately US$8.48 per tonne. Just over 4 per cent was allocated to the ports company.

Report of the Oil-for-Food Incjuiry 302

Table 25.6 Distribution of the inland transportation fees collected from Alia in respect of the shipment of wheat referred to on page UNO.0003.4949 in Exhibit 81

Amount Proportion of fees

Recipient (US$) paid for this shipment

Amount paid to Al-Sawmaa 47,654.18 2.16

Amount paid to ports 90,542.95 4.09

Amount paid to water 26,275.49 1.19

Amount paid lo the water 5,462.25 0.25

Amount paid to land 407,443.26 18.43

Amount paid to railroad Illegible Amount paid to Ministry of Trade / Grains 71,481.27 3.23

Amount paid to Ministry of Trade / Correspondences 47,654.19 2.16

Amount paid to the Ministry of Finance *additional 525,615.04 23.77

Amount paid to the Ministry of Finance *service 965,220.74 43.65

Amount paid to al-wataniya insurance 23.827.09 1.08

Total 2,211,176.46 100.00

Report of the Oil-for-Food Incjuiry 303

Notes

1 lie final report, p. 282, footnote 456 (Ex 13 UNO.OOOS.OOOl at UNO.0005.0289). 2 Memorandum of Understanding. 3 IIC final report, p. 283 (Ex 13 UNO.0005.0001 at UNO.0005.0290). 4 lie final report, p. 283 (Ex 13 UNO.0005.0001 at UNO.0005.0290). 5 lie final report, p. 283 (Ex 13 UNO.0005.0001 at UNO.0005.0290). 6 See Figure 26.2. 7 Including the additional 10% after-sales-service fee. s In particular contracts Allll and All 12 both dated 20 December 2001. 9 Altfiough the vessel's name was covered over in the copy of the document that comprises Exhibit 80 upon the application of AWB for confidentiality reasons, it is clearly apparent on the copy of the document reproduced at page 283 of the lIC's final report (Ex 13 UNO.0005.0001 at UNO.0005.0290).

Including the additional 10% after-sales-service fee. 11 Ex 1468, AWB.0079.0022_R. 12 Ex 1468, AWB.0079.0021_R. 13 Ex 948, IIC-ARC-100567. This is subject to a deduction of ¨8 from the total amount deposited presumably for bank fees or charges and thereby a difference of ¨4 in respect of this particular shipment.

i-i Being 99.75% of the inland transportation fees that it had collected. 15 Ex 1377, UNO.0003.4852 (lie.ARe.004995). 16 Consistent with the evidence of Mr AI-Absi (Ex 141, WST.0007.0001 at 0002, para. 7). 17 Ex 80, UNO.0003.4875; see the box labelled 'Total Collected'. Although the funds were remitted from a euro account, the Iraqi documents deal with the amounts in US dollars. 18 In the copy reproduced at p. 283 of the IIC final report the 'Comm.' number is 110013. This is one of the slight differences between Exhibit 80 and the copy reproduced. 19 Ex 80, UNO.0003.4875 (IIC-ARC-005018). This figure is the same in both Exhibit 80 and the copy reproduced in the IIC's final report (Ex 13 UNO.0005.0001 at UNO.0005.0290). 20 lie final report, p. 282, footnote 456 (Ex 13 UNO.0005.0001 at UNO.0005.0289); see also Ex 1211, UN0.0003.0949_R and UN0.00031017_R. 21 Ex 729, AWB.0062.0098, AWB.0062.0106; and AWB.0062.0096; see also Ex 1468, AWB.0062.0095_R. 22 Ex 729,1377, AWB.0062.0096. 23 Ex 729, AWB.0017.0050; Ex 1468, AWB.0062.0064-0065_R. Both documents are also in Ex 729. 24 Ex 1468, AWB.0017.0045_R (bill of lading). 25 Or 'Unloading location' as it is described in the document. 26 Ex 80, UNO,0003,4875 (IIC-ARC-005018). 27 Ex 1377, UN0.0003.4884_R (lIC-ARC-005027). 28 Ex 1211, UN0.0003.1018_R. 29 Although this information was covered over in the copy of the document that comprises Exhibit 80 on the application of AWB for confidentiality reasons, it is clearly apparent on the copy of the document reproduced at p. 283 of the IIC's final report (Ex 13 UNO.0005.0001 at UNO.0005.0290). 30 Ex 1468, AWB.0017.0045_R. 31 Ex 1468, AWB.0017.0048_R.

Report of the Oil-for-Food I n c j u i ry 304

3 2 E x 1211 , UN0.0003.1017-1018_R ; se e als o E x 1468 , AWB.OOO l .0207_ R a t 0208_ R whic h record s a n adjustmen t tha t AW B sough t t o mak e i n relatio n t o inlan d transportatio n fee s o f a late r shipmen t t o tak e accoun t o f difference s betwee n th e amoun t shippe d an d amoun t discharge d i n respec t o f th e shipment s mad e unde r contract s A l l l l an d Al l 12 , includin g th e shipmen t o n th e Bei Hai. Thi s record s a differenc e o n discharg e o f 231.3 9 tonne s rathe r tha n th e 241. 6 tonne s recorde d i n E x 8 0 i n th e II C fina l repor t a t p . 28 3 (E x 1 3 UNO.0005.000 1 a t UNO.0005.0290) . Bot h document s recognis e th e sligh t differenc e i n discharg e althoug h ther e i s sligh t differenc e i n th e amount s recorded . 3 3 Excep t tha t th e quantit y wa s (metric ) 'tonnes ' an d no t (imperial ) 'tons' . 3 4 E x 80 , UNO.0003.4875. ' 3 5 E x 80 , UNO.0003.4875 .

3 6 Fo r reason s se t ou t furthe r belo w thi s i s afte r deductio n o f Alia' s ow n commission . 3 ? Adoptin g th e figure s i n th e bo x a t th e foo t o f Exhibi t 8 0 th e amoun t transferre d woul d hav e bee n US$2,247,207.6 1 whic h i s i n fac t US$3.6 5 les s tha n th e amoun t recorde d a s havin g bee n collected . Howeve r i t seem s likel y tha t th e amoun t collecte d wa s th e US$2,247,2 n .2 6 recorde d o n Exhibi t 8 0 a s fro m th e amoun t collecte d a tota l o f US$2,247,210.9 3 wa s distribute d (thi s bein g mor e tha n th e tota l collecte d i f on e wa s t o calculat e tha t fro m th e figure s se t ou t i n th e bo x appearin g a t th e foo t o f Exhibi t 80) . 3 8 E x 80 , UNO.0003.4875 . 3 9 E x 1468 , AWB.0062.0108_R , AWB.0062.0110_R ,

4 0 E x 1468 , AWB.0139.0273_ R a t 0275_R , cl . 9 . 4 1 Thes e U S dolla r equivalent s diffe r slightl y fro m thos e calculate d b y th e Iraqi s an d whic h ar e discusse d late r i n thi s appendix . 4 2 Commonwealt h Ban k o f Australi a i n Sydney . 4 3 E x 1468 , AWB.0079.0021_R .

4 4 E x 1468 , AWB.0079.0022_R . Thi s i s equa l t o th e quantit y o f whea t shippe d (42,00 0 MTs ) x €55.4 0 pmt . 4 5 Thi s i s th e shipmen t tha t i s referre d t o o n UNO.0003.485 6 i n E x 81 , whic h i s discusse d late r i n thi s appendix .

4 6 E x 1468 , AWB.0161.00086_R . 4 7 Describe d i n th e ban k statemen t a s a 'F X RECEIPT' . 4 8 E x 1468 , AWB.0161.00086_R . 4 9 Th e cop y o f th e origina l statemen t i s behin d ta b C o f tha t Exhibit ; th e cop y o f th e translatio n i s behin d ta b D . 5 0 E x 948 , lie-ARC-100567 . 5 4 E x 1468 , AWB.0001.0265_R . 5 2 E x 1468 , AWB.0001.0265_R . 5 3 Th e vesse l referre d t o i n E x 80 . 5 4 Namel y €4,620,258.48 . 5 5 E x 1468 , AWB.0161.0065_R .

Namel y €4,620,250.480 . 5 7 Th e differenc e betwee n th e amoun t pai d an d th e amoun t deposite d (Namel y €8 ) i s als o th e differenc e betwee n recorde d i n relatio n t o th e deposit s an d correspondin g payment s b y AW B discusse d i n th e precedin g appendix . 5 8 E x 80 , UNO.0003.487 5 (nC-ARC-005018) . 5 9 €2,326,800 . '^<'€4,620,250.48 .

Report of the Oil-for-Foo d Incjuiry 3 0 5

Namel y €2,326,800 . E x 141 , WST.0007.000 1 a t 0002 , para . 7 . 6 3 Tha t is-th e ISCWT . « E x 1377 , AWB.0295.0278 . 6 5 E x 1468 , AWB.0079.0021_R , AWB.0079.0022_R . 6 6 Se e above . 6 7 E x 1377 , UNO.0003.485 1 (IIC-ARC-004994) . 6 8 E x 1377 , UNO.0003.485 2 (IIC-ARC-004995) . 6 9 E x 1377 , UNO.0003.485 2 (IIC-ARC-004995) . E x 1377 , AWB.0295.0278 . 7 1 Ther e i s a sHgh t differenc e o f € 4 betwee n th e amoun t pai d b y AW B (€2,326,800 ) an d amoun t recorde d a s havin g bee n receive d b y Ali a (€2,326,796) . Thi s i s hal f o f th e differenc e o f € 8 betwee n th e tota l amoun t pai d b y AW B (€4,620,258.48 ) an d th e tota l amoun t deposite d int o Alia' s accoun t (€4,620,250.48) . I t woul d appea r tha t thi s differenc e o f € 8 (presumabl y attributabl e t o ban k fee s o r charges ) ha s bee n apportione d equall y b y Ali a betwee n th e tw o shipment s t o whic h AWB' s paymen t o f €4,620,258.4 8 related . 7 2 E x 1377 , UNO.0003.485 2 (IIC-ARC-004995) . 7 3 Agai n ther e i s a ver y sligh t difference , bein g €3 . 7 4 E x 141 , WST.0007.000 1 a t 0002 , para . 7 . Thi s als o confirm s tha t th e 'Transpor t fees ' recorde d i n th e bo x a t th e foo t o f Exhibi t 8 0 i s th e amoun t o f th e inlan d transportatio n fee s receive d b y Ali a les s it s commission . 7 5 E x 948 , Ta b D , IIC-ARC-100567-IIC-ARC-100572 . 7 6 Bein g th e amoun t o f th e 'Transpor t fees ' appearin g i n th e bo x a t th e foo t o f Exhibi t 80 . 7 7 Bein g th e amoun t o f th e 'Transpor t fees ' appearin g i n th e bo x a t th e foo t o f Exhibi t 8 0 les s th e equivalen t (i n euros ) o f th e 'Service s fees ' tha t i s als o referre d t o i n th e bo x a t th e foo t o f Exhibi t 8 0 an d whic h hav e bee n deducte d fro m th e 'Transpor t fees ' t o giv e th e 'Tota l [amount ] Collected ' referre d t o highe r u p i n Exhibi t 80 . 7 8 E x 1377 , UNO.0003.485 2 (IIC-ARC-004995) . 7 9 E x 1377 , UNO.0003.485 2 (IIC-ARC-004995) . 8 " Se e th e referenc e t o '6/3 ' i n th e bo x appearin g a t th e foo t o f tha t Exhibit . 8 1 E x 948 , IIC-ARC-10057 1 (bein g pag e 1096 3 o f th e ban k statement s fo r tha t account) . 8 2 E x 948 , IIC-ARC-10057 1 (bein g pag e 1096 3 o f th e ban k statement s fo r tha t account) . 8 3 Tha t is-99.75% . 8 4 US$2,247,210.9 3 o f US$2,247,211,2 6 collecte d o r 99.9999% . 8 5 E x 1377 , AWB.0295.0274 . 8 6 Namel y US$48.97 . 8 7 E x 1246 , AWB.5042.0238_R ; E x 384 , AWB.0084.0058-0062_R . 8 8 Adoptin g th e exchang e rat e use d b y AW B fo r th e conversio n o f th e contrac t price , th e after -sales-servic e fe e componen t o f th e tota l amoun t payabl e wa s US$22.4 7 pe r tonne , althoug h th e not e a t AWB.0295.027 4 record s i t a s bein g US$20.4 0 pe r tonne . 8 9 Includin g th e additiona l 10 % after-sales-servic e fee . 9 1 E x 1468 , AWB.0079.0062_R , AWB.0079.0063_R . 9 1 E x 948 , IIC-ARC-100570 . Thi s i s subjec t t o a deductio n o f € 8 fro m th e tota l amoun t deposite d presumabl y fo r ban k fee s o r charge s an d thereb y a differenc e o f € 4 i n respec t o f thi s particula r shipment . Thi s deposi t i s als o discusse d i n Appendi x 2 4 i n th e comment s o n IIC-ARC-100570 . 9 2 Bein g 99.75 % o f th e inlan d transportatio n fee s tha t i t ha d collected . 9 3 E x 1377 , UNO.0003.485 2 (IIC.ARC.004995) .

3 0 6 Report of the Oil-for-Food liiquir} /

Consisten t wit h th e evidenc e o f M r Al-Abs i (E x 141 , WST.0007.000 1 a t 0002 , para . 7) . 9 5 E x 81 , UNO.0001.0083 . Se e th e bo x labelle d 'Tota l Collected' . An d whic h i s no t repeate d i n thi s appendi x becaus e o f a clai m o f confidentialit y b v AWB . 9 7 E x 1468 , AWB.0017.0073_R . 9 8 E x 1468 , AWB.0062.0047_R , 0048_R . 9 9 Bein g th e dat e th e bil l o f ladin g wa s issue d (E x 1468 , AWB.0017.0069_R) . 10 0 Th e figure s hav e bee n maske d i n th e publi c version s o f th e exhibits , pursuan t t o a clai m fo r confidentialit y b y AWB . Althoug h ther e i s a sligh t discrepanc y i n thes e tw o figures , namel y 0. 3 tonnes , thi s i s no t materia l an d ma y b e a typographica l erro r i n Exhibi t 8 1 o r it s translation . i m E x 8 1 , U N O . O O O l . 0 0 8 3 .

Includin g th e additiona l 10 % after-sales-servic e fee . 10 3 E x 1468 , AWB.0062.0108_R , AWB.0062.0110_ R an d AWB.0062.0111_R . 10 4 Commonwealt h Ban k o f Australia . 10 5 E x 1468 , AWB.0079.0062_R . 10 6 E x 1468 , AWB.0079.0063^R . 10 7 Bein g th e sam e shipmen t tha t i s referre d t o i n E x 81 , UNO.0003.4856 . Thi s shipmen t i s discusse d furthe r below . AW B pai d th e inlan d transportatio n fee s i n respec t o f thi s shipmen t i n tw o payments , on e wit h th e shipmen t th e subjec t o f UNO.0001.008 3 i n Exhibi t 8 1 an d th e othe r i n conjunctio n wit h th e paymen t o f th e inlan d transportatio n fee s fo r th e shipmen t o n th e Bei Hai.

10 8 E x 1468 , AWB.0079.0063_R . 10 9 E x 1468 , AWB.0161.0078_R . 11 0 E x 948 , IIC-ARC-10057 0 (a t Ta b D) . 11 1 Namel y €3,202,529.0 9 (E x 1468 , AWB.0078.0062_R) . 11 2 E x 1468 , AWB.0161.0078_R . 11 3 Namel y €3,202,521.090 . 11 4 thi s differenc e i s als o o f th e sam e orde r tha t i s note d i n relatio n t o th e othe r transfer s b y AW B an d deposit s int o Alia' s accoun t considere d i n bot h thi s appendi x an d Appendi x 24 . 11 5 E x 1468 , AWB.OOO l .0271_R . 11 6 E x 1468 , AWB.0001.0271_R . 11 7 E x 1377 , UNO.0003.491 9 th e translatio n o f whic h appear s a t UNO.0003.4920 . 11 8 E x 1468 , AWB.0079.0063_R . 11 9 Namel y €3,202,529.0 9 (E x 1468 , AWB.0079.0062_R) . 12 0 Namel y €3,202,521,09 0 (E x 948 , IIC_ARC-100570) . 12 1 Namel y €2,786,563.4 9 (E x 1468 , AWB.0079.0063_R) . 12 2 E x 1377 , UNO.0003.485 1 OlC-ARC-004994) ; E x 1377 , UNO.0003.485 2 (IIC-ARC-004995) . 12 3 Ther e i s a sligh t differenc e o f €4.4 9 betwee n th e amoun t pai d b y AW B (€2,786,563.49 ) an d amoun t recorde d a s havin g bee n receive d b y Ali a (€2,786,559 ) whic h i s hal f o f th e differenc e o f € 8 betwee n th e tota l amoun t pai d b y AW B (€3,202,529.09 ) an d th e tota l amoun t deposite d

(€3,202,521.09) . Tha t differenc e o f € 8 (presumabl y attributabl e t o ban k fee s o r charges ) appear s t o hav e bee n divide d equall y betwee n th e tw o shipment s i n respec t o f whic h thi s payment/deposi t relate . 12 4 Thi s als o confirm s tha t th e 'Transpor t fees ' recorde d i n th e bo x a t th e foo t o f Exhibi t 8 0 i s th e amoun t o f th e inlan d transportatio n fee s receive d b y Ali a les s it s commission . 12 5 E x 1467 , AWB.0079.0022_R . 12 6 E x 1467 , AWB.0079.0021,R .

Report of the OU-for-Food Inquirí! 3 0 7

1- 7 E x 948 , lIC-ARC-100567 . Thi s i s subjec t t o a deductio n o f € 8 fro m th e tota l amoun t deposite d presumabl y fo r ban k fee s o r charge s an d thereb y a differenc e o f € 4 i n respec t o f thi s particula r shipment . 12 8 E x 1467 , AWB.0079.0062_R , AWB.0079.0063_R . 12 9 E x 948 , IIC-ARC-100570 . Thi s i s subjec t t o a deductio n o f € 8 fro m th e tota l amoun t deposite d presumabl y fo r ban k fee s o r charge s an d thereb y a differenc e o f € 4 i n respec t o f thi s particula r shipment .

i--'! ' E x 1467 , AWB.OOO l .0270_R . 13 1 Bein g 99.75 % o f th e tota l inlan d transportatio n fee s tha t i t ha d collecte d fro m AWB . 13 2 E x 1377 , UN0.0003.485 2 {IIC.ARC.004995) . 13 3 Consisten t wit h th e evidenc e o f M r AI-Abs i (E x 141 , WST.0007.000 1 a t 0002 , para . 7) .

13 4 E x 81 , UNO.0003.4856 . Se e th e bo x labelle d Tota l Collected' . 13 5 I n particula r whe n compare d t o th e bil l o f ladin g (E x 1467 , AWB.0015.0006_R) . 13 6 Se e Chapte r 23 . 13 7 E x 729 , AWB.0062.0241 , AWB.0062.0243 .

E x 1467 , AWB.0062,0170_R . Th e applicatio n fo r tha t permissio n i s E x 1467 , AWB.0062.0173_R . 13 9 E x 1467 , AWB.OO I 5.0006_R . 14 0 E x 81 , UNO.0003.4856 .

14 1 E x 1377 , UNO.0003.486 7 (IIC-ARC-OOSOIO) . 14 2 E x 1467 , AWB.0062.0114_R . 14 3 E x 1467 , AWB.0062.0114^R . Ther e i s a sligh t differenc e betwee n AWB' s U S dolla r figure s fo r

th e inlan d transportatio n fee s payabl e an d th e figure s use d b y th e Iraqi s (see , fo r example . E x 1377 , UNO.0003.486 0 whic h treat s th e €55.1 7 pe r tonn e fe e a s equivalen t t o US$46.70) . 14 4 Commonwealt h Ban k o f Australia . 14 5 E x 1467 , AWB.0079.0021_R . 14 6 E x 1467 , AWB.0079.0022_R . I n fact , i t represente d a n underpaymen t o f th e amoun t du e an d a furthe r paymen t ha d t o b e mad e b y AW B i n respec t o f th e balanc e o f th e fee s th e followin g month . 14 7 E x 1467 , AWB.0079.0022_R . 14 S E x 1467 , AWB.0079.0063_R . 14 9 E x 1467 , AWB.0161.0119_R . 15 0 E x 948 , lIC-ARC-10056 7 (a t Ta b D) . 15 1 Namel y €4,620,258.4 8 (E x 1467 , AWB.0079.0021_R) . 15 2 E x 1467 , AWB.0161.0119_R . 15 3 Namel y €4,620,250.480 . 15 4 Thi s differenc e i s als o o f th e sam e orde r tha t i s note d i n relatio n t o th e othe r transfer s b y AW B an d deposit s int o Alia' s accoun t considere d i n bot h thi s appendi x an d Appendi x 24 .

15 5 E x 1467 , AWB.0001.0265_R . 15 6 E x 1467 , AWB.0001.0265_R . 15 7 Tha t is-th e ISCWT .

15 8 E x 1377 , UN0.0003.4864_R . 15 9 Se e above . 16 0 E x 1467 , AWB.0001.0270_R . 16 1 E x 1377 , UN0.0003.4864_R . 16 2 E x 1467 , AWB.0001.0270_R . 16 3 Commonwealt h Ban k o f Australia .

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ifr i E x 1467 , AWB.0079.0062_R . 16 5 E x 1467 , AWB.0079.0063_R , 16 b E x 1467 , AWB.0001.0270_R . 16 7 E x 1467 , AWB.0079.0063_R . 16 S I n th e amoun t o f €2,786,563.49 .

i6 y E x 1467 , AWB.0161.0123_R . 17 0 E x 948 , IIC-ARC-10057 0 (a t Ta b D) . 17 1 Namel y €3,202,529.0 9 (E x 1467 , AWB.0079.0062_R) . 17 2 E x 1467 , AWB.0161.0123_R . 17 3 Namel y €3,202,521.090 . 17 4 Thi s differenc e i s als o o f th e sam e orde r tha t i s note d i n relatio n t o th e othe r transfer s b y AW B an d deposit s int o Alia' s accoun t considere d i n bot h thi s appendi x an d als o Appendi x 24 . 17 5 E x 1467 , AWB.0001.0271_R . 17 6 E x 1467 , AWB.0001.0271_R . 17 7 Tha t is-th e ISCWT . 17 8 E x 1377 , UN0.0003.4862_R . 17 9 Se e above . 18 0 Namel y €2,293,458.4 8 o n 1 8 Apri l 200 2 an d €415,965.6 0 o n 1 5 Ma y 2002 .

18 1 Th e differenc e i s i n fac t €9.08 . 18 2 E x 1377 , UNO.0003.485 1 (IIC-ARC-004994) ; E x 1377 , UNO.0003.485 2 (IIC-ARC-004995) , 18 3 Thi s als o confirm s tha t th e 'Transpor t fees ' recorde d i n th e bo x a t th e foo t o f Exhibi t 8 0 i s th e amoun t o f th e inlan d transportatio n fee s receive d b y Ali a les s it s commission . 18 4 E x 1377 , UNO.0003.4852 . 18 5 E x 1377 , UNO.0003.4852 , 18 6 E x 1377 , UNO.0003.4852 . 18 7 E x 1467 , AWB.0079.0063-0064_R . 18 8 E x 1467 , AWB.0079.0063-0064_R . 18 9 E x 948 , IIC-ARC-100571 . Thi s i s subjec t t o a deductio n o f € 8 fro m th e tota l amoun t deposite d presumabl y fo r ban k fee s o r charge s an d thereb y a differenc e o f € 4 i n respec t o f thi s particula r shipment . 19 0 Bein g 99.75 % o f th e inlan d transportatio n fee s tha t i t ha d collected . 19 1 E x 1377 , UNO.0003.485 2 (IIC.ARC.004995) . 19 2 Consisten t wit h th e evidenc e o f M r Al-Abs i (E x 141 , WST.0007.000 1 a t 0002 , para . 7) , 19 3 E x 81 , UNO.0003,4892 . 19 4 Namel y US$2,241,402,9 8 (E x 81 , UNO.0001.0083) . Se e th e bo x labelle d 'Tota l Collected' . 19 5 An d whic h i s no t repeate d i n thi s appendi x pursuan t t o a clai m fo r confidentialit y b y AWB ,

19 6 E x 1467 , AWB.OO l 5.0008_R . 19 7 E x 1467 , AWB.0062.0164-0165_R . 19 8 E x 1467 , AWB,0015.0043_R .

19 9 Th e figure s hav e bee n maske d i n th e publi c version s o f th e exhibits , pursuan t t o a clai m fo r confidentialit y b y AWB . 2 » Th e dat e o f th e bil l o f ladin g (E x 1467 , AWB.0015.0043_R) , 2oiE x 81 , UNO.0003.4892 . 20 2 E x 1377 , UNO.0003.4901 . 20 3 E x 1467 , AWB.0062.0n4_R . 20 4 Commonwealt h Ban k o f Australia . 20 5 E x 1467 , AWB.0079.0064_R ,

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E x 1467 , AWB.0079.0063_R . 20 7 E x 1467 , AWB.0079.0063_R . 20 H E x 1467 , AWB.0079.0063_R . 20 9 E x 1467 , AWB.0161.0126_R . 21 0 E x 1468 , AWB.0161.0082_R . 21 1 E x 1468 , AWB.0161.0082_R . 21 2 E x 948 , nC-ARC-100571 . 21 3 Namel y €5,220,121.6 1 (E x 1467 , AWB.0079.0064_R) . 21 4 E x 1467 , AWB.0161.0126_R . 21 5 Namel y €5,220,113.610 . 21 6 Thi s differenc e i s als o o f th e sam e orde r tha t i s note d i n relatio n t o th e othe r transfer s b y AW B an d deposit s int o Alia' s accoun t considere d i n bot h thi s appendi x an d Appendi x 24 . 21 7 E x 1467 , AWB.0161.0127_R . 21 8 E x 1467 , AWB.0161.0127_R . 21 9 E x 1467 , AWB.0001.0272_R . 22 0 E x 1467 , AWB.0001.0272_R . 22 1 Tha t is-th e ISCWT . 22 2 E x 1377 , UNO.0003.4898 . 22 3 E x 1377 , UNO.0003.485 1 (IlC-ARC-004994 ) an d UNO.0003.485 2 (IIC-ARC-004995) . 22 4 E x 1377 , UNO.0003.485 2 (IIC-ARC-004995) . 22 5 Ther e i s a sligh t differenc e o f € 4 betwee n th e amoun t pai d b y AW B (€2,317,140 ) an d amoun t recorde d a s havin g bee n receive d b y Ali a (€2,317,136 ) whic h i s hal f o f th e differenc e o f € 8 betwee n th e tota l amoun t pai d b y AW B (€5,220,121.61 ) an d th e tota l amoun t deposite d (€5,220,113.610 ) recorde d o n pag e IIC-ARC-10057 1 o f Exhibi t 948 . Thi s differenc e o f € 8 (presumabl y attributabl e t o ban k fee s o r charges ) appear s t o hav e bee n divide d equall y betwee n th e tw o shipment s fo r whic h AWB' s paymen t o f €5,220,121.6 1 wa s made . 22 6 E x 1377 , UNO.0003.485 2 (IIC-ARC-004995) . 22 7 E x 1377 , UNO.0003.485 2 (IIC-ARC-004995) . 22 8 E x 141 , WST.0007.000 1 a t 0002 , para . 7 . 22 9 E x 81 , UNO.0003.4892 . 23 0 Namel y €2,311,343 . Se e E x 1377 , UNO.0003.4852 . 23 1 Alternativel y th e referenc e t o '23134 2 Euro ' i n th e bo x appearin g a t th e foo t o f pag e UNO.0003.489 2 shoul d rea d €2,312,34 3 consisten t wit h th e sixt h lin e o f th e translatio n o f documen t UNO.0003.489 9 whic h i s a t UNO.0003.4900 . Howeve r i f tha t i s correct , the n ther e i s a discrepanc y betwee n thi s figur e an d th e amoun t receive d i n th e tabl e heade d 'Australia n Whea t Boar d payments ' o f €1,00 0 an d no t €1 . 23 2 E x 1377 , E x 1377 , UNO.0003.4852 . 23 3 Se e th e referenc e t o '24/6' . 23 4 Whic h i s E x 948 , lIC-ARC-100572 . 23 5 E x 1467 , AWB.0161.0170_R . 23 6 Bein g 99.75 % o f th e inlan d transportatio n fee s tha t i t ha d collected . 23 7 E x 1377 , UNO.0003.4847 . 23 8 Consisten t wit h th e evidenc e o f M r AI-Abs i (E x 141 , WST.0007.000 1 a t 0002 , para . 7) . 23 9 E x 81 , UNO.0003.4949 . 24 0 An d whic h i s no t repeate d i n thi s appendi x b y reaso n o f a clai m fo r confidentialit y b y AWB . 24 1 E x 1467 , AWB.0016.0202_R . 24 2 E x 1467 , AWB.0016.0203_R .

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243 Ex 1467, A WB.OOl 6.0200_R. The figures have been masked in the public versions of the exhibits, pursuant to a claim for confidentiality by AWB. 2´ Being the date of the bill of lading (Ex 1467, AWB.0015.0043_R). 246 Ex 81, UNO.0003.4949. 247 Ex 1467, AWB.0062.0114_R. 248 Commonwealth Bank of Australia. 24"^ Ex 1467, AWB.0161.0170^R. 250 Ex 1467, AWB.0079.0078_R (which is also Ex 1467, AWB.0016.0204_R). 251 Ex 1467, AWB.0079.0078_R (which is also Ex 1467, AWB.0016.0204_R). 252 Ex 1467, AWB.0079.0078_R (which is also Ex 1467, AWB.0016.0204_R). 253 Ex 1467, AWB.0161.0172_R. 254 Ex 1467, AWB.0161.0172_R. 255 Ex 1377, UNO.0003.4955. 256 Ex 1377, UNO.0003.4955. 257 Ex 1467, AWB.0079.0078_R (which is also Ex 1469, AWB.0016.0204_I^). 258 Ex 1377, UNO.0003.4847-4848. 259 Ex 1377, UNO.0003.4845-4846. 260 Ex 81, UNO.0003.4949. 261 Ex 1377, UNO.0003.4847-4848. 262 Ex 1377, UNO.0003.4847-4848.

Report of the Oil-for-Food Incjuiry 311

Appendi x 2 6 Outlin e o f potentiall y

relevan t offence s

Introductio n

Thi s appendi x provide s a n outhn e o f offence s o r contravention s agains t th e law s o f th e Commonwealt h an d State s tha t ma y potentiall y b e relevan t t o th e fact s a s found . Som e o f th e issue s tha t ma y aris e i n an y crimina l o r civi l proceeding s base d o n thos e offence s o r contravention s ar e als o addressed . Finding s an d recommendation s i n relatio n t o thes e offence s ar e mad e i n Volum e 4 .

Th e Inquir y ha s ha d regar d t o a larg e rang e o f offence s an d contravention s agains t Commonwealt h la w an d th e law s o f th e variou s State s an d Territories . Thi s appendi x discusse s onl y thos e offence s that , o n clos e analysis , migh t b e applicabl e t o th e fact s an d th e subjec t o f recommendations . Th e offence s addresse d i n thi s appendi x include :

 Offence s involvin g deception , fals e statement s an d dishonest y —i n particula r variou s Commonwealt h offence s relatin g t o th e deceptio n o f Commonwealt h entitie s

 Offence s involvin g briber y o r secre t commission s

 Offence s involvin g mone y launderin g

 Offence s relatin g t o th e financin g o f terroris m

 Offence s unde r th e Bankin g (Foreig n Exchange ) Regulation s an d th e Custom s Ac t

 Offence s unde r th e Corporation s La w an d Corporation s Ac t

I t i s wort h notin g tha t th e variou s Unite d Nation s Securit y Counci l Resolution s tha t impose d th e sanction s an d establishe d th e Oil-for-Foo d Programm e ha d n o direc t effec t o n Austraha n domesti c la w becaus e the y wer e not , i n terms , incorporate d i n Australia n domesti c law. i I t follow s tha t ther e i s n o offenc e know n t o th e la w i n an y Australia n jurisdictio n constitute d b y th e breac h o f Unite d Nation s sanction s o r Securit y Counci l Resolutions . Domesti c effec t wa s give n t o th e Resolution s b y variou s Commonwealt h Regulations . Th e offence s create d b y thos e Regulation s ar e addresse d i n thi s appendix .

Th e Inquiry' s Term s o f Referenc e requir e th e consideratio n o f whethe r offence s migh t hav e bee n committe d b y variou s corporat e entities ; relevantl y AWB , Rhin e Ruhr , Alkaloid s o f Australia , BH P an d Tigris . Fo r thi s reason , befor e addressin g specifi c

Report of the Oil-for-Food Incjuiry 313

offences , i f i s necessar y t o giv e som e consideratio n t o th e principle s applicabl e t o corporat e crimina l liability .

Corporat e Crimina l Responsibilit y

A corporatio n ca n onl y ac t b y th e action s o f it s officers , employee s an d agents . Likewise , a corporatio n ca n onl y posses s knowledg e o r intentio n a s a resul t o f knowledg e o r a n intentio n possesse d b y it s officers , employee s an d agents . I n considerin g th e potentia l crimina l liabilit y o f AWB , Rhin e Ruh r an d Alkaloids , i t i s necessar y t o conside r whethe r th e relevan t act s an d knowledg e o f certai n o f th e officers , employee s o r agent s o f eac h compan y ca n b e attribute d t o th e company .

I n th e cas e o f Stat e offence s an d Commonwealt h offence s (othe r tha n offence s i n th e Crimina l Code ) tha t wer e committe d prio r t o 1 4 Decembe r 2001 , corporat e crimina l responsibilit y i s governe d b y th e commo n law . I n th e cas e o f offence s unde r th e Crimina l Cod e (whic h commence d operatio n o n 2 4 Ma y 2001 ) an d othe r Commonwealt h offence s committe d afte r 1 4 Decembe r 2001 , Par t 2. 5 o f th e Crimina l Cod e contain s specifi c provision s dealin g wit h th e circumstance s i n whic h a compan y ma y b e foun d guilt y o f an y offence .

Commo n la w

Th e leadin g decisio n o n th e tes t o f whethe r th e act s an d knowledg e o f a natura l perso n ma y b e attribute d t o corporatio n fo r th e purpose s o f th e crimina l la w i s th e decisio n o f th e Hous e o f Lord s i n Tesco Supermarkets Ltd v Nattrass [1972 ] A C 153. ^ Lor d Rei d explaine d th e natur e an d rational e o f corporat e crimina l liabilit y i n th e followin g terms :

I mus t star t b y considerin g th e natur e o f th e personaHt y whic h b y a fictio n th e la w attribute s t o a corporation . A livin g perso n ha s a min d whic h ca n hav e knowledg e o r intentio n o r b e negligen t an d h e ha s hand s t o carr y ou t hi s intentions . A corporatio n ha s non e o f these ; i t mus t ac t throug h livin g persons , thoug h no t alway s on e an d th e sam e person . The n th e perso n wh o act s i s no t speakin g o r actin g fo r th e company . H e i s actin g a s th e compan y an d hi s min d whic h direct s hi s act s i s th e min d o f th e company . Ther e i s n o questio n o f th e compan y bein g vicariousl y liable . Hi s i s no t actin g a s a servant , representativ e o r agen t o r delegate , H e i s a n embodimen t o f th e company , or , on e coul d say , h e hear s an d speak s throug h th e person a o f th e company , withi n hi s appropriat e sphere , an d hi s min d i s th e min d o f th e company . I f i t i s a guilt y min d the n tha t guil t i s th e guil t o f th e company . I t mus t b e a questio n o f la w whether , onc e th e fact s hav e bee n ascertaine d a perso n i n doin g

particula r thing s i s t o b e regarde d a s th e compan y o r merel y a s th e company' s servan t o r agent . 3

Lor d Rei d the n referre d t o th e judgmen t o f Dennin g L J i n H.L Bolton (Engineering) Co. Limited v T. J. Graham & Sons Limited'^, wher e Dennin g L J stated :

3 1 4 Report of the Oil-for-Fooii Iiiqiiiry

Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will [of the company]. Others are directors and managers who represent the directing mind and will of the company, and control what it does. The state of mind of these managers is the state of mind of the company and is treated by the law as such.5

In relation to this dicta. Lord Reid stated in Tesco (at 171):

There have been attempts to apply Lord Denning's words to all servants of a company whose work is brain work, or who exercise some managerial discretion under the direction of superior officers of the company. I do not think that Lord Denning intended to refer to them. He only referred to those who 'represent the directing mind and will of the company, and control what it does.'

I tfiink that is right for this reason. Normally the board of directors, the managing director and perhaps other superior officers of a company carry out the functions of management and speak and act as the company. Their subordinates do not. They carry out orders from above and it can make no difference that they are given some measure of discretion. But the board of directors may delegate some part of their functions of management giving to their delegate full discretion to act independently of instructions from them. I see no difficulty in holding that they have thereby put such a delegate in their place so that within the scope of the delegation he can act as the company. It may not always be easy to draw the line but there are cases in which the line must be drawn. ^

Lord Morris of Borth-y-Gest (at 180) cited with approval the following test by Viscount Haldane in Lennanis Carrying Co Limited v Asiatic Petroleum Co Limited'^

My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporahon, the very ego and centre of the personality of the corporation. That person may be under the direction of the shareholders in general meeting; that person may be the board of directors itself, or it may be, and in some companies it is so, that that person has an authority co-ordinate with the board of directors given to him under the articles of association, and is appointed by the general meeting of the company, and can only be removed by the general meeting of the company.^

Viscount Dilhorne also referred to the tests formulated by Viscount Haldane in Lennard's Carrying v Asiatic Petroleum and Denning LJ in Bolton v Graham and stated (at 187G):

These passages, I think, clearly indicate that one has in relation to a company to determine who is or who are, for it may be more than one, in actual control of the operations of the company, and the answer to be given to that question may vary from company to company depending on its organisation. In my view, a person who is in actual control of the operations of a company or part of them and who is not responsible to another person in the company for the manner in which he discharges his duties in the sense of being under his orders, cannot be regarded as [a person other than the corporation].''

In Lord Diplock's opinion, the starting place to look to discover by what natural persons a corporation's powers are exercisable is in its constitution; its memorandum

Report of the OU-for-Food Inquir Ì! 315

an d article s o f association . Lor d Diploc k the n formulate d th e followin g test , whic h i s perhap s th e mos t frequentl y cite d tes t fo r corporat e crimina l liability :

I n m v view , therefore , th e question : wha t natura l person s ar e t o b e treate d i n la w a s bein g th e compan y fo r th e purpos e o f act s don e i n th e cours e o f it s busines s .. . i s t o b e foun d b y identifyin g thos e natura l person s wh o b y th e memorandu m an d article s o f associatio n o r a s a resul t o f actio n take n b y th e directors , o r b y th e compan y i n genera l meetin g pursuan t t o th e articles , ar e entruste d wit h th e exercis e o f th e power s o f th e company .

Th e decisio n i n Tesco an d th e principle s enunciate d therei n hav e bee n accepte d anc i applie d i n Australia . Th e tes t expounde d b y Lor d Diploc k wa s applie d b y th e Hig h Cour t i n Nissho huai Australia Limited v Malni/sian luteriiatioual Shipping Coriwratiou

Berhad.^^ Tha t wa s a civi l cas e an d concerned , i n genera l terms , th e questio n whethe r th e lac k o f reasonabl e diligenc e b y reaso n o f a n ac t o r omissio n o f a n employe e o f a corporatio n wa s t o b e attribute d t o th e compan y itself . Nevertheless , i t demonstrate s a n acceptanc e o f Tesco an d wha t th e commentator s hav e terme d th e 'identificatio n doctrine. '

I n Hamilton v VWhitehead^'^, th e Hig h Cour t cite d wit h apparen t approva l th e passag e o f Lor d Rei d i n Tesco an d referre d t o th e statemen t b y Dennin g L J i n Bolton v Graham. Th e liabilit y impose d b y th e offenc e th e subjec t o f tha t cas e wa s direct , no t vicarious , liabilit y an d th e Hig h Cour t hel d tha t ther e coul d b e littl e doub t tha t th e ac t o f th e managin g directo r o f th e corporatio n i n questio n w a s th e ac t o f th e corporatio n becaus e 'h e wa s it s managin g directo r an d hi s min d wa s th e min d o f th e company .

Th e identificatio n doctrin e ha s bee n accepte d an d th e test s propose d i n Tesco, particularl y thos e o f Lor d Rei d an d Lor d Diplock , hav e bee n cite d wit h approva l i n a numbe r o f othe r Australia n courts , includin g th e Ful l Federa l Cour t i n Universal Telecasters (Qld) Limited v Gutherie.^^

Th e variou s test s enunciate d b y th e La w Lord s i n Tesco ar e no t identical . Th e tes t expounde d b y Lor d Diploc k ma y b e a mor e stringen t tes t t o th e exten t tha t hi s Lordshi p suggest s tha t th e onl y individual s w h o ma y b e identifie d wit h th e compan y ar e thos e w h o ar e entruste d wit h th e powe r o f th e compan y i n eithe r th e

M e m o r a n d u m an d Article s o f Associatio n o r a s a resul t o f a forma l delegatio n b y th e board . Th e othe r La w Lords , i n particula r Lor d Reid , refe r t o delegatio n b y th e board , bu t d o no t insis t o n forma l delegation . Th e questio n arise s whethe r Lor d Diplock' s

stric t tes t (i f i t b e such ) i s th e appropriat e tes t o r whethe r i t i s necessar y onl y t o establis h tha t th e relevan t individua l i n fac t (an d irrespectiv e o f an y forma l delegation ) ha d bee n delegate d certai n responsibilitie s an d ha d ful l discretio n t o ac t

independentl y o f th e board . Further , th e questio n arise s whethe r i t i s necessar y t o prov e tha t th e relevan t individua l ha d delegate d t o hi m o r he r al l o f th e power s o f th e company , o r whethe r i t insufficien t t o prov e tha t th e individua l ha d bee n delegate d responsibilit y i n th e particula r are a i n whic h the y committe d th e allege d crimina l act .

I n Meridian Global Funds Management Asia Limited v Securities Commission''-^, Lor d Hoffman , deliverin g th e judgmen t o f th e Priv y Council , expresse d th e opinio n tha t th e

316 Report of the Oil-for-Food lii quir } /

particula r rul e o f attributio n t o b e a p p l i e d i n a n y give n cas e w a s a matte r o f

interpretatio n o r constructio n o f th e relevan t la w o r 'substantiv e rule' . H i s L o r d s h i p state d (a t 507) :

On e possibilit y i s tha t th e cour t ma y com e t o th e conclusio n tha t th e rul e wa s no t intende d t o appl y t o companie s a t all ; fo r example , a la w whic h create d a n offenc e fo r whic h th e onl y penalt y wa s communit y service , Anothe r possibilit y i s tha t th e cour t migh t interpre t th e la w a s meanin g tha t i t coul d appl y t o a compan y only o n th e basi s o f it s primar y rule s o f attribution , i.e . i f th e ac t givin g ris e t o liabilit y wa s specificall y authorise d b y a resolutio n o f

th e boar d o r a unanimou s agreemen t o f th e shareholders . Bu t ther e wil l b e man y case s i n whic h neithe r o f thes e solution s i s satisfactory ; i n whic h th e cour t consicfer s tha t th e la w wa s intende d t o appl y t o companie s an d that , althoug h i t exclude s ordinar y vicariou s

liability , insistenc e o n th e primar y rule s o f attributio n woul d i n practic e defea t tha t intention . I n suc h a case , th e cour t mus t fashio n a specia l rul e o f attributio n fo r th e particula r substantiv e rule . Thi s i s alway s a matte r o f interpretation : give n tha t i t wa s intende d t o appl y t o a company , ho w wa s i t intende d t o apply ? Whos e ac t (o r knowledge , o r stat e o f mind ) was for this purpose intende d t o coun t a s th e ac t etc . o f th e company ? On e find s th e answe r t o thi s questio n b y applyin g th e usua l canon s o f interpretatio n an d takin g int o accoun t th e languag e o f th e rul e (i f i t i s a statute ) an d it s conten t an d policy.^ ^

I n Meridian, th e particula r offenc e provisio n w a s a provisio n w h i c h r e q u i r e d notic e o f substantia l i n v e s t m e n t s t o b e give n t o th e c o m p a n y a n d th e stoc k exchange . T w o senio r i n v e s t m e n t m a n a g e r s breache d thi s provisio n an d th e questio n w a s w h e t h e r th e k n o w l e d g e o f thes e investmen t m a n a g e r s coul d b e attribute d t o th e c o m p a n y . I t w a s hel d tha t th e offenc e w a s no t on e i n respec t o f whic h vicariou s liabilit y w a s applicable . Th e specia l rul e o f attributio n w h i c h th e Priv y Counci l ' f a s h i o n e d ' fo r thi s particula r offenc e focusse d o n w h e t h e r th e investmen t m a n a g e r s h a d authorit y t o acquir e th e relevan t interest s whic h shoul d h a v e bee n notified . Th e k n o w l e d g e o f th e investmen t m a n a g e r s h a d t o b e attribute d t o th e c o m p a n y otherwis e th e polic y o f th e statut e w o u l d b e defeated .

Lor d H o f f m a n , h o w e v e r , e m p h a s i s e d tha t thi s particula r rul e o f attributio n wil l no t a p p l y i n al l cases :

Bu t thei r Lordship s woul d wis h t o guar d themselve s agains t bein g understoo d t o mea n tha t wheneve r a servan t o f a compan y ha s authorit y t o d o a n ac t o n it s behalf , knowledg e o f tha t ac t wil l fo r al l purpose s b e attribute d t o th e company . I t i s a questio n o f constructio n i n eac h cas e a s t o whethe r th e particula r rul e require s tha t th e knowledg e tha t a n ac t ha s bee n done , o r th e stat e o f min d wit h whic h i t wa s done , shoul d b e attribute d t o th e company . Sometimes , a s i n In re Supply of Ready Mixed Concrete (No. 2) [1995 ] 1 A C 45 6 an d thi s case , i t wil l b e appropriate . Likewis e i n a cas e i n whic h a compan y wa s require d t o retur n fo r revenu e purpose s an d th e statut e mad e i t a n offenc e t o mak e a fals e retur n wit h inten t t o deceive , th e Divisiona l Cour t hel d tha t th e men s re a o f th e servan t authorise d t o discharg e th e dut y t o mak e th e retur n shoul d b e attribute d t o th e company : se e Moore v I. Bresler Ltd [1944 ] 2 A H E R 515 . O n th e othe r hand , th e fac t tha t a company' s employe e i s authorise d t o driv e a lorr y doe s no t i n itsel f lea d t o th e conclusio n tha t i f h e kill s someon e b y reckles s driving , th e compan y wil l b e guilt y o f manslaughter . Ther e i s n o inconsistency . Eac h i s a n exampl e o f a n attributio n rul e fo r a particula r purpos e tailore d a s i t alway s mus t b e t o th e term s an d policie s o f th e substantiv e rule .

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A n additiona l p o i n t w h i c h come s ou t o f Meridian, i s tha t i n th e inquir y w h e t h e r th e relevan t individua l i s p r o p e r l y t o b e r e g a r d e d a s th e directin g m i n d a n d wil l o f th e c o m p a n y , attentio n s h o u l d b e focusse d o n th e particula r are a o f responsibilit y

delegate d t o tha t individual . I t i s no t necessar y t o p r o v e tha t th e individua l w a s th e directin g m i n d a n d wil l fo r al l o f th e c o m p a n y ' s activities , onl y th e directin g m i n d a n d wil l i n th e are a i n w h i c h th e allege d crimina l c o n d u c t o r k n o w l e d g e occurred . Thi s i s particularl y a p p a r e n t f r o m th e N e w Zealan d C o u r t o f A p p e a l decisio n i n Meridian.

H a r d i e Boy s J (deliverin g th e j u d g m e n t o f th e Court ) state d (a t 302) :

O n th e totalit y o f th e materia l w e hav e n o doub t tha t Ko o i s properl y t o b e regarde d a s Meridian' s 'directin g min d an d will ' fo r th e purpose s o f thi s proceeding . Th e descriptio n woul d no t b e correc t i n relatio n t o al l Meridian' s activities , bu t tha t i s no t necessary . A s Lor d Diploc k note d i n Tesco , th e descriptio n ma y appl y t o a n individua l notwithstandin g tha t ther e i s a boar d o f directors , i f th e boar d ha s delegate d t o hi m th e exercis e o f th e company' s powers . I t i s enoug h i f i n th e particula r are a o f responsibilit y delegate d t o hi m th e individua l ca n b e sai d t o b e th e company' s directin g min d an d will ; se e fo r exampl e H L Bolton (Engineering Co Ltd v T } CraJiani and Sons Ltd pe r Dennin g L J a t p 172 ; R z' Andreivs-

Weatherfoil Ltd [1972 ] 1 Al l E R 6 5 a t p 70 ; R i - N M Paterson & Sons Ltd (1980 ) 11 7 DL R (3d ) 51 7 (SCC) ; R v McNamnra (No 1) 5 6 CC C (2d ) 193 , 303f f (Ont:CA) ; Commissioner of Taxation v Wliitfords Beach Pty Limited (1982 ) 5 6 ALJ R 240 , 24 5 (HCA ) pe r Gibb s CJ .

I n th e spher e o f investment , includin g th e buyin g an d sellin g o f shares , i t i s quit e apparen t tha t Ko o ha d ful l responsibility , withi n th e company' s polic y guidelines . No t onl y wa s h e hel d ou t b y th e compan y a s th e perso n i n contro l o f tha t par t o f th e business , bu t i t seem s tha t th e boar d exercise d n o role , unles s i t wa s a supervisor y one , bu t ther e i s n o evidenc e abou t that . Furthe r proo f i s give n b y th e ver y fac t tha t wit h hi s subordinate , h e wa s abl e t o undertak e thes e particula r transaction s withou t the m comin g t o th e notic e o f th e managin g director , M r Armour , o r th e board . ^ ^

I n th e Priv y Counci l decisio n i n Meridian, Lor d H o f f m a n cite d Admiralty v the Owners of the Steamship Divina (the Truculent)^^ a n d The Lady Gwendolen. In The Lady Gwendolen, th e issu e w a s w h e t h e r th e failur e t o w a r n th e captai n o f a shi p o f certai n

d a n g e r s w a s a n ac t p e r f o r m e d b y th e owner-corporation . W i n n L J state d (a t 355) :

Accordingl y I fin d i t unnecessar y o n th e vie w alread y expresse d t o sa y mor e abou t th e reporte d decisions , base d i n som e instances , i t seem s t o me , rathe r o n admission s tha n argument , whethe r a give n faul t i s merel y tha t o f a servan t o r als o tha t o f a n owner , tha n tha t i n m y opinio n whereve r th e faul t eithe r occur s i n a functio n o r spher e o f actio n whic h

th e owne r ha s retaine d fo r himsel f o r i s tha t o f a manage r independen t o f th e owne r t o who m th e owne r ha s surrendere d al l relevan t power s o f control , i t i s actua l faul t o f th e owne r withi n th e meanin g o f th e s e c t i o n .

Further , Willme r L J state d (a t 343-4) :

I t i s necessar y t o loo k closel y a t th e organisatio n o f th e compan y i n orde r t o se e o f wha t individua l i t ca n fairl y b e sai d tha t hi s ac t o r omissio n i s tha t o f th e compan y itself.. . Where , a s i n th e presen t case , a compan y ha s a separat e traffi c department , whic h assume s responsibilit y fo r runnin g th e company' s ships , I se e n o goo d reaso n wh y th e hea d o f tha t departmen t .. . shoul d no t b e regarde d a s someon e whos e actio n i s th e actio n o f th e compan y itself , s o fa r a s i t concern s an y thin g t o d o wit h th e company' s ships.-- '

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This point was also made by Estey J, delivering the judgment of the Supreme Court of Canada in Cmmdiau Dredge & Dock Co Limited v The Queeu.-^ That case was concerned with allegations of collusive tendering and with the issue whether the acts of various managers of companies could be attributed to the various companies. Estey J conducted a detailed review of the authorities in the United Kingdom, Canada, Australia and the United States of America in relation to corporate criminal responsibility. At 330-331 Estey J stated:

In Tesco, supra, at p. 171, Lord Reid employed the phrase acting 'within the scope of delegation' of the corporation's business. The essence of the test is that the identity of the directing mind and the company coincide so long as the actions of the former are performed by the manager within the sector of the corporation operation assigned to him by the corporation. The sector may be functional, or geographic, or may embrace the entire undertaking of the corporation. The requirement is better stated when it is said that the act in question must be done by the directing force of the company when carrying out his assigned function in the corporation.

In this passage, Estey J refers to Lord Reid's use of the phrase 'within the scope of delegation'. Lord Reid also stated (at 174-5):

I have said that a board of directors can delegate part of their functions of management so as to make a delegate an embodiment of the company within the sphere of delegation.2?

Canadian Dredge and Dock has been cited in a number of Austrahan cases; including Edward Karwacki Smith & Co Pty Limited v jacka Nominees Pty Limited (in liq)^^ and Beach Petroleum ISlL v ]ohnson.^'^ In Beach Petroleum, a civil case in which allegations of fraud were made, von Doussa J cited a portion of the judgment in Canadian Dredge and Dock which dealt with the situation where the directing mind and will acts in fraud of the company (but which included reference to the sphere of operation), and stated that 'this statement of the law in Canada provides compelling guidance to the law which should be apphed in this case.'

The other important point to emerge from Canadian Dredge and Dock concerns the issue whether the relevant delegation of power to the individual is required to be express and formal or whether it is sufficient that as a matter of fact the particular individual

exercises full responsibility within the relevant sphere assigned to him or her. In Canadian Dredge and Dock, Estey J expressed the identification principle in the following terms (at 323):

a median rule whereby the criminal conduct, including the state of mind, of employees and agents of the corporation is attributed to the corporation so as to render the corporation criminally liable so long as the employee or agent in question is of such a position in the organisation and activity of the corporation that he or she represents its de facto directing mind, will, centre, brain area or ego so that the corporation is identified with the act of that individual.-!"

Estey J's statement that the individual must represent the corporation's de facto mind may be contrasted with Lord Diplock's formulation in Tesco which on one reading

Report of the OU-for-Food Inquir Ì! 319

may require de jure control by the individual. The central fact in Canaduin Dredge and Dock was: 'Each of the appellants had a manager who conducted the business of the company relating to the submission of bids for tender dredging work."Æ!

Estey J also stated as follows (at 331):

It is no defence to the apphcation of this doctrine that a criminal act by a corporate employee cannot be within the scope of his authority unless expressly ordered to do the act in question. Such a condition would reduce the rule to virtually nothing. Acts of the ego of

the corporation taken within the assigned managerial area may give rise to corporate criminal responsibility, whether or not there he fonnnl delegation; whether or not there be awareness of the activity in the board of directors or the officers of the company, and, as discussed below, whether or not there be express prohibition.[Emphasis added]

Meridian has been frequently cited with approval in cases in various differetit contexts.^-' In relation to criminal cases, in Director of Public Prosecutions (Victoria) Reference No. 1 of 1996 (Victorian Court of Appeal, unreported l(i/9/97) the Victorian Court of Appeal accepted that 'Lord Hoffman's approach to the problem of corporate liability was correct.' It was also accepted as the applicable law by Bell J in the Victorian Supreme Court in ABC Developmental Learning Centres Pty Limited v Wallace^"^, a case concerning a prosecution of a company for an offence under the Children's Services Act 1996 (Vic).

Thus the rule of attribution to be applied in any particular case is to be determined as a matter of interpretation or construction. An offence involving fraud or dishonesty * as opposed to a mere regulatory offence *is likely to be construed such that it will only apply to a company (to use Lord Hoffman's words) 'on the basis of its primary rules of attribution' as expounded in Tesco. It is unlikely to be held to be sufficient for the prosecution to prove merely that the relevant servant or agent had authority to do the relevant act on the company's behalf. Rather, it is necessary to prove that the individual had delegated to him or her full discretion to act independently of the board or any superiors with respect to the subject matter that included the relevant act.

A potentially relevant issue in the context of the knowledge or intention of a company is whether knowledge or intention possessed by a company at one point in time, as a result of the possession of that knowledge or intention by a particular officer or officers, may later be 'forgotten' by the company when that ofticer or those officers leave the company and are replaced by other officers who do not possess the knowledge. Most of the authorities relating to this point are civil cases.^^

In the case of a criminal offence, for a corporation to be criminally responsible it must possess the relevant knowledge at the time of the alleged unlawful act. Whether the company possessed information at that particular point in time is ultimately a question of fact. As with the case of knowledge possessed by a natural person defendant, any suggestion by a corporate defendant that it once possessed the knowledge but had forgotten it by the time of the relevant transaction will be closely

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scrutinised.''^' Much will depend on the 'nature and importance of the information said to be once known and later forgotten/^" whether the new officer was under a duty to ascertain the information or knowledge when they took up the office'*'^, whether the information was recorded in the company's books and records and the nature of the relevant transaction. Ultimately, however, it must be a matter for the prosecution to prove that at the time that the relevant act occurred, a current officer or officers of the company whose knowledge may be imputed to the company possessed the

knowledge or information.

There is also authority for the proposition that the knowledge of, or information possessed by, various officers of a company may be aggregated anci imputed to the company.

Commonwealth offences post 24 May 2001 *Part 2.5 of the Criminal Code

Part 2.5 of the Criminal Code applies to offences under the Criminal Code and other Commonwealth offences committed after 14 December 2001. Sections 12.1 of the code makes it clear that the Code applies to bodies corporate in the same way as it applies to individuals and that a body corporate may be found guilty of any offence, including one punishable by imprisonment.

Part 2.5 contains provisions that deal with the physical elements and the fault elements of an offence insofar as they apply to a corporation. Section 12.2 deals with the physical elements of the offence and provides as follows:

12.2 If a physical element of an offence is committed by an employee, agent or officer of a body corporate acting within the actual or apparent scope of his or her employment, or within his or her actual or apparent authority, the physical element must also be attributed to the body corporate.

It follows that insofar as the physical act of an offence is concerned, it is necessary only to prove that the employee, agent or officer of the defendant company that carried out the relevant act was acting within his or her actual or apparent authority. If, for example, the relevant act is the submission of the UN Notification form and contract documents to DFAT, it is necessary to prove only that the officer responsible for this communication was acting within his actual or apparent authority. As

discussed below it is relevant to note in this regard that the officer of the company who performed the relevant act on behalf of the company need not be the same person who possessed the necessary mental state or fault element.

The rule of attribution in the case of the fault element of an offence is dealt with in section 12.3. Subsections 12.3 (1) to (2) provide as follows:

(1) If intention, knowledge or recklessness is a fault element in relation to a physical element of an offence, that fault element must be attributed to a body corporate that expressly, tacitly or impliedly authorised or permitted the commission of the offence.

Report of the Oil-for-Food Incjuiry 321

(2 ) th e mean s b y whic h suc h a n authorisatio n o r permissio n ma y b e establishe d include :

(a ) provin g tha t th e bod y corporate' s boar d o f director s intentionally , knowingl y o r recklessl y carrie d ou t th e relevan t conduct , o r expressly , tacitl y o r impliedl y authorise d o r permitte d th e commissio n o f th e offence ; o r

(b ) provin g tha t a hig h manageria l agen t o f th e bod y corporat e intentionally , knowingl y o r recklessl y carrie d ou t th e relevan t conduct , o r expressly , tacitl y o r impliedl y authorise d o r permitte d th e commissio n o f th e offence ; o r

(c ) provin g tha t a corporat e cultur e existe d withi n th e bod y corporat e tha t directed , encouraged , tolerate d o r le d t o non-complianc e wit h th e relevan t provision ; o r

(d ) provin g tha t th e bod y corporat e faile d t o creat e an d maintai n a corporat e cultur e tha t require d complianc e wit h th e relevan t provision .

(3 ) Paragrap h (2){b ) doe s no t appl y i f th e bod y corporat e prove s tha t i t exercise d du e diligenc e t o preven t tli e conduct , o r th e authorisatio n o r permission .

Fo r tli e purpose s o f paragrap h 12.3(2)(b) , 'hig h manageria l agent ' i s define d i n subsectio n (6 ) a s meanin g 'a n employee , agen t o r office r o f th e bod y corporat e wit h dutie s o f suc h responsibilit y tha t hi s o r he r conduc t ma y fairl y b e assume d t o represen t th e bod y corporate' s policy. '

Paragraph s (c ) an d (d ) significantl y expan d th e scop e o f th e attributio n rul e fro m th e positio n a t commo n law . The y provide , i n substance , th e faul t elemen t o f th e offenc e ma y b e prove d o n th e basi s o f a 'corporat e culture ' tha t le d t o th e commissio n o f th e offence , a s oppose d t o th e requiremen t t o prov e actua l knowledg e o r intentio n o n th e par t o f th e director s o r othe r senio r management . 'Corporat e culture ' i s define d i n subsectio n 12.3(6 ) a s meanin g 'a n attitude , policy , rule , cours e o f conduc t o r practic e existin g withi n th e bod y corporat e generall y o r i n th e par t o f th e bod y corporat e i n whic h th e relevan t activitie s take s place. ' Subsectio n 12.3(4 ) specifie s som e factor s relevan t t o ascertainin g whethe r suc h a corporat e cultur e exists :

(4 ) Factor s relevan t t o th e applicatio n o f paragrap h (2)(c ) o r (d ) include :

(a ) whethe r authorit y t o commi t a n offenc e o f th e sam e o r a simila r characte r ha d bee n give n b y a hig h manageria l agen t o f th e bod y corporate ; an d

(b ) whethe r th e employee , agen t o r office r o f th e bod y corporat e wh o committe d th e offenc e believe d o n reasonabl e grounds , o r entertaine d a reasonabl e expectation , tha t a hig h manageria l agen t o f th e bod y corporat e woul d hav e authctrise d o r permitte d th e commissio n o f th e offence .

Sectio n 12.3(4 ) doe s no t purpor t t o b e a n exhaustiv e statemen t o f th e factor s tha t woul d mak e ou t a corporat e culture . Paragrap h (b) , however , i s o f particula r potentia l significance . Th e effec t o f i t i s tha t i t ma y b e possibl e t o prov e th e existenc e o f th e relevan t cultur e b y provin g tha t th e relevan t office r wh o di d commi t th e offence , wh o migh t no t himsel f o r hersel f b e a 'hig h manageria l agent, ' believe d o n reasonabl e

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grounds that a high managerial agent would have authorised the commission of the offence. It is not necessary to prove that the high managerial agent in fact possessed the relevant intention or knowledge. In the case of AWB, to make out the relevant fault element against AWB in respect of an offence relating to the misleading of DFAT, or the concealing of facts from DFAT, it would be sufficient to prove that the relevant officer or officers who may have been responsible for the dealings with DFAT believed on reasonable grounds that a director of manager, who was a high managerial agent, would have authorised or permitted the misleading of, or concealment of facts from, DFAT.

The Criminal Code provisions dealing with attribution are potentially narrower than the common law rules of attribution in at least one respect. That is that, by reason of subsection 12.3(3), where the relevant knowledge or intention is possessed by a high managerial agent (as opposed to the board of directors), the company has an available defence if it had itself exercised due diligence to prevent fhe conduct that constituted the offence. The establishment of some form of infernal audit or corporate risk committee may, in some circumstances, amount to due dihgence.

Offences involving deception, false statements and

dishonesty

The various criminal statutes of the Commonwealth and each of the potentially relevant States contain a series of cognate offences that have as elements or ingredients the obtaining of benefits by deception, or the making false or misleading statements, or other conduct involving dishonesty or fraud. The Commonwealth provisions will apply where the benefit was obtained from, or the false statements or

the dishonesty or fraud was practised upon, the Commonwealth. State provisions will apply where the benefit was obtained from, or the false statements or the dishonesty or fraud was practised upon, some other person or entity. In the case of state offences, it is also necessary to find some jurisdictional nexus with the State.

Commonwealth provisions *conduct prior to 24 May 2001

In relation to any conduct that occurred prior to 24 May 2001, the relevant offences are contained in the Crimes Act 1914. The relevant offence provisions in the Crimes Act were repealed^o and replaced by offences in the Criminal Code from 24 May 2001.

As discussed in Chapter 12, the Australian companies who participated in the Oil-for-Food Programme interacted with DFAT at a number of levels. Most significantly, they:

(a) submitted documents *a United Nations form entitled 'Notification or Request to Ship Goods to Iraq,' together with copies of documents recording the contractual arrangements between the company and the relevant Iraqi

Report of the OU-for-Food Inquir Ì! 323

perso n o r entit y —t o DFA T o n th e basi s tha t DFA T would , upo n satisfyin g itsel f o f certai n matters , submi t th e document s t o th e Unite d Nations ;

(b ) applie d t o DFA T fo r a permissio n t o expor t th e good s pursuan t t o th e Customs (Prohibited Exports) Regulations 1958.

Fo r it s part , DFA T responde d o r acte d upo n th e documentatio n submitte d t o it , o r th e applicatio n fo r permissio n t o export , by , i n summary :

(a ) considerin g whethe r th e Notificatio n for m wa s properl y complete d an d tha t th e transactio n reporte d i n th e Notificatio n for m an d th e accompanyin g contractua l document s di d no t appea r t o infring e th e Unite d Nation s sanction s agains t Iraq . I f s o satisfied , DFA T woul d certif y an d submi t th e document s t o th e Unite d Nation s vi a Australia' s permanen t missio n t o th e Unite d Nation s i n Ne w York;4 i

(b ) i n th e cas e o f permission s t o export , i f DFA T receive d notificatio n fro m th e Unite d Nation s tha t a particula r contrac t ha d bee n approve d fo r paymen t unde r th e Oil-for-Foo d Programme , togethe r wit h a reques t fo r permissio n t o expor t b y th e company , DFA T woul d arrang e fo r a permissio n t o expor t t o b e signe d b y a delegat e o f th e Ministe r fo r th e purpose s o f th e Customs (Prolubited Exports) Regulations.'^^

I f th e availabl e evidenc e wa s capabl e o f establishin g th e followin g matters , a numbe r o f provision s o f th e Crimes Act 1914 coul d potentiall y b e relevan t i n th e cas e o f conduc t occurrin g befor e 2 4 Ma y 2001 ;

(a ) th e Notificatio n for m o r an y o f th e accompanyin g documentatio n submitte d t o DFA T containe d a materiall y fals e o r misleadin g statement ; o r materiall y fals e o r misleadin g information ; o r

(b ) th e Notificatio n for m o r an y o f th e accompanyin g documentatio n submitte d t o DFA T omitte d informatio n tha t rendere d th e informatio n i n th e

documentatio n misleadin g i n a materia l respect ; an d

(c ) b y reaso n o f th e fals e o r misleadin g documentatio n submitte d t o it , DFA T conferre d a benefi t u p o n th e company — eithe r b y submittin g th e

documentatio n t o th e Unite d Nation s o r b y causin g a permissio n t o expor t t o b e granted ; o r

(d ) th e purpose , objec t o r intentio n o f th e compan y i n submittin g th e fals e o r misleadin g documentatio n t o DFA T wa s t o obtai n a benefi t fro m DFAT , o r wa s otherwis e t o deceiv e a n office r o f DFA T int o doin g somethin g tha t th e office r woul d no t otherwis e hav e done .

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Th e potentiall y relevan t offenc e provision s ar e section s 29A , 29 B an d 29 D o f th e Crimes Act o f thes e provisions . Sectio n 29 D i s th e mos t genera l and , fo r a n u m b e r o f reasons , ma y b e th e mos t apposite . I t i s accordingl y deal t wit h first .

Section 2911 of the Crinn-s Act

Prio r t o it s repea l effectiv e 2 4 Ma y 2001 , sectio n 29 D o f th e Crimes Act provide d a s follows :

29 D A perso n wh o defraud s th e Commonwealt h o r a publi c authorit y unde r th e Commonwealt h i s guilt y o f a n indictabl e offence .

Th e element s o f thi s offenc e ar e undefine d excep t b y commo n la w concept s o f fraud . I n genera l terms , t o defrau d mean s t o us e dishones t mean s t o depriv e a perso n o f mone y o r property , o r t o pu t th e person' s mone y o r propert y a t ris k o r t o prejudiciall y affec t tha t perso n i n relatio n t o som e lawfu l right , interest , opportunit y o r advantag e

knowin g tha t the y hav e n o righ t t o depriv e tha t perso n o f tha t mone y o r propert y o r t o prejudic e tha t person' s interests.^ ^ Th e tw o ke y elements , therefore , ar e first , th e us e o f 'dishones t means ' an d second , a n elemen t o f deprivation .

T o prov e dishones t mean s i t i s usuall y necessar y t o prov e tha t th e defendan t m a d e o r too k advantag e o f representation s whic h the y kne w t o b e false , o r promise s tha t the y kne w woul d no t b e carrie d out , o r conceale d fact s whic h the y ha d a dut y t o disclose ,

o r engage d i n conduc t whic h the y ha d n o righ t t o engag e i n an d whic h the y kne w the y ha d n o righ t t o engag e in.^ ^ Th e latte r cas e wil l includ e conduc t tha t involve s a breac h o f duty , trus t o r confidence , o r b y whic h a n unconscionabl e advantag e i s t o b e take n o f another .

Th e elemen t o f deprivatio n usuall y involve s makin g us e of , o r prejudicing , anothe r person' s economi c righ t o r interest , o r inducin g anothe r perso n t o refrai n fro m actin g t o hi s o r he r economi c disadvantage . However , th e elemen t o f deprivatio n ma y als o b e m a d e ou t i f dishones t mean s ar e employe d t o deceiv e publi c officer s int o committin g a breac h o f duty , o r i f a perso n responsibl e fo r a publi c dut y i s

intentionall y deceive d int o doin g somethin g tha t h e o r sh e woul d no t hav e don e bu t fo r th e deceit , o r i f th e du e performanc e o f a publi c dut y b y a n office r i s otherwis e interfere d with.^i » I t i s no t a necessar y elemen t o f th e offenc e tha t th e defendan t actuall y obtaine d a benefi t o r advantag e correspondin g i n som e wa y wit h deprivatio n o r los s t o th e Commonwealth.^ ^

Th e menta l elemen t o f a n offenc e involvin g frau d i s intention : tha t is , th e defendan t intende d t o depriv e o r prejudic e th e interest s o f a thir d perso n b y th e us e o f mean s tha t ar e dishonest .

I n th e presen t context , th e offenc e o f defraudin g th e Commonwealt h contrar y t o sectio n 29 D o f th e Crime s Ac t wil l b e mad e ou t i f th e defendan t (AWB , Rhin e Ruh r o r Alkaloid s o r th e relevan t officer s involve d i n th e c o n d u c t ^ ^ ) , use d dishones t mean s t o deceiv e a n office r o f DFA T int o doin g somethin g i n th e cours e o f thei r dut y tha t the y

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woul d no t hav e don e bu t fo r th e deceit . Fo r practica l purposes , th e offenc e woul d b e m a d e ou t i f th e availabl e evidenc e w a s capabl e o f provin g that :

(a ) th e Notificatio n for m o r an y o f th e accompanyin g documentatio n submitte d t o DFA T t o th e knowledg e o f th e defendan t eithe r containe d a materiall y fals e o r misleadin g statemen t o r statement s o r omitte d fro m i t a matte r o r thin g tha t rendere d th e informatio n i n th e documentatio n misleadin g i n a materia l respect ; o r

(b ) th e defendan t intentionall y conceale d fact s tha t i t ha d a dut y t o disclos e o r tha t i t kne w woul d b e relevan t t o th e action s o f DFA T referre d t o i n (c) ; o r

(c ) th e conduc t i n eithe r (a ) o r (b ) deceive d a n office r o f DFA T int o eithe r

forwardin g document s t o th e Unite d Nation s o r causin g a delegat e o f th e Ministe r t o sig n a Permissio n t o Expor t i n circumstance s where , bu t fo r th e deceit , th e office r woul d no t hav e take n tha t action ;

(d ) th e defendan t intende d t o us e th e mean s i n (a) , (b ) o r (c ) t o deceiv e th e office r o f DFA T int o takin g th e actio n o r action s referre d t o i n (d) .

A facto r t o b e note d i n relatio n t o 29 D o f th e Crime s Ac t i n th e presen t contex t i s tha t i f th e dishones t conduc t an d deceptio n o f DFA T wa s ongoing , sustaine d an d systematic , a singl e coun t o f defraudin g th e Commonwealt h durin g th e perio d o f th e conduc t coul d b e charge d an d woul d no t b e duplicitous.^ ^

Section 29A of the Crimes Act

Prio r t o it s repea l effectiv e 2 4 Ma y 2001 , sectio n 29 A o f th e Crimes Act provide d a s follows :

(1 ) An y perso n wlio , wit h inten t t o defraud , b y an y fals e pretenc e obtain s fro m th e Commonwealth , o r fro m an y publi c authorit y unde r th e Commonwealt h an y chattel , money , valuabl e securit y o r benefit , shal l b e guilt y o f a n offence .

(2 ) An y perso n who , wit h inten t t o defraud , b y an y fals e pretence , cause s o r procure s an y mone y t o b e paid , o r an y chattel , valuabl e securit y o r benefi t t o b e delivere d o r given , b y th e Commonwealt h o r b y an y publi c authorit y unde r th e Commonwealt h t o an y person , shal l b e guilt y o f a n offence .

Th e element s o f th e offenc e create d b y subsectio n 29A(1) , relevan t t o th e matte r a t hand , ar e a s follows :

(1 ) th e defendant ;

(2 ) wit h inten t t o defraud ;

(3 ) b y an y fals e pretence ;

(4 ) obtain s a benefi t fro m th e Commonwealth .

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The offence created by subsection 29A(2) covers the situation where the actions of the defendant result in the Commonwealth conferring a benefit on some other person. The first three elements are the same as the subsection 29A(1) offence. Element (4) is, relevantly:

(4) causes or procures a benefit to be delivereci or given by the Commonwealth to any person.

There is considerable overlap between section 29D and section 29A to the extent that, in most cases where the elements of the offence under section 29A are made out, an offence under section 29D would also be made out. The reverse, however, is not always the case because the dishonest means that may constitute the fraud under section 29D may not involve a false pretence. Section 29D also does not have as an element the obtaining of a benefit. The other significant difference between section 29A and section 29D is that section 29A employs words of singularity, meaning that a separate offence must be pleaded in relation fo each false pretence that results in a benefit being obtained.''"

The element of intent to defraud has been considered above in the context of section 29D. Suffice it to say that an intention to defraud will be found where the defendant intencis, by dishonest means, to deceive a public official into doing or not doing something that they would, or would not have done, but for the deceit.

A false pretence is essentially the same as an untrue representation. It may be a representation by words, writing or conduct or a combination of these^^, and may be implied from conciuct.^^ certain circumstances a false pretence or representation may be made by silence^^, however ordinarily silence will only amount to a

representation if there is a duty to disclose.^^ xhe false representation must generally be in relation fo a material existing fact, rather than a statement of opinion or intention about future c o n d u c t.

The false representation need not be made directly to the Commonwealth. The offence may be made out if the defendant makes a false representation to an innocent agent who then communicates the information to the C o m m o n w e a l t h. ^^ In those

circumstances it would be necessary to prove that the defendant knew that the agent would convey the representation to the Commonwealth.

The use of the word 'by' in element (3) imports an element of causation. It must be proved that the officers of the Commonwealth responsible for conferring the benefit were influenced by the false pretence.^^ If they were influenced, it matters not that they may also have been influenced by other matters^Æ, or that they had the means of finding out whether the pretence was true or false, or that they ought reasonably to have known that the information was misleading.^^ The relevant false pretence must not, however, be too remote from the obtaining of the benefit.

It is an element of the offence that the defendant actually obtained a benefit. The meaning of 'benefit' is not defined in the Crimes Act. The correct approach to

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construing the words in section 29A, having regard to their context in the Crimes Act, is to give them their ordinary meaning and not limit the ambit of the operation of the section by reference either to the common law offence of false pretences or to decisions on other statutes differently worded.''' The language of the section was 'no doubt occasioned by the legislature's appreciation of the expansive range of financial

and other benefits provided by the Commonwealth and its i n s t r u m e n t a l i t i e s . T he word 'benefit' should accordingly be given a wide meaning not limited to property or

financial benefits.

There is at least one potential limitation on the construction of 'benefit.' That limitation flows from the use of the word 'obtain' in the section, in his dissenting judgment in Bncoii v Salamnne^^, which concerned the meaning of 'benefit' in the context of section 29B of the Crimes Act, Taylor J said:

It was, of course, plainly intended to bring within the purview of the section misrepresentations made with a view to obtain not only money, but money's worth. And, of course, its meaning may extend further. But however far the meaning of the word may be thought to extend it must be a 'benefit' which is capable of being 'obtained'. And the word 'obtain' in the section must, I think, be taken to have been used in the sense of 'acquire' (see

per Maule J in The Queen v Garrett (1)) so the 'benefit' of which the section speaks is something which must be 'acquired'.

The majority in Bacon v Salamane did not embrace Taylor J's construction of 'benefit' and held that obtaining einployment with the Commonwealth was a benefit within the meaning of the section. The majority judgments turned, however, on whether earlier authority, which was concerned with different legislation and with the question whether a contract could be a benefit, ought to dictate the construction of section 29B. The issue is whether an intangible advantage that is not in a form that is capable of being 'obtained' can be a 'benefit' within the meaning of section 29A (and section 29B). In this context, it may be questionable that the benefit of having DFAT certify documents and submit them to the United Nations is a benefit that is capable of being obtained.

Ultimately the question whether a benefit has been conferred by the Commonwealth is question of fact. Putting aside the issue arising from the dissenting judgment of Taylor J in Bacon v Salamane, there would appear to be no reason in principle why it would not be a benefit to have DFAT certify convey to the United Nations a company's Notification form and contractual tiocuments. This is so particularly having regard to DFAT's role in the Oil-for-Food Programme and the fact that the

United Nations only accepted documentation certified and submitted by Missions of member countries.''^ obtaining of permission to export under the Customs (Prohibited Exports) Regulations is a clearer case of a benefit. There is no reason in principle why the obtaining of such a permission would not be regarded as a benefit in circumstances where the relevant company would not otherwise be permitted to lawfully export goods to Iraq.

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The mental element of the offence under section 29A is intention to defraud, discussed above, and knowledge that the relevant representation was false.

In the present context, the offence of obtaining a benefit from the Commonwealth by false pretence contrary to section 29A of the Crimes Act may be made out if the evidence is capable of demonstrating the following:

(a) the defendant (either one of the relevant companies or their officers) intended by dishonest means to deceive an officer or officers of DFAT; and

(b) the Notification form and contractual documents submitted by the company to DFAT contained, to the knowledge of the defendant, a false representation, or had omitted from them information that rendered the documentation misleading in a material particular; or

(c) the conduct of the company in submitting the document to DFAT together with its failure to disclose to DFAT other material facts (for example other collateral arrangements with Iraq relating to the payment of inland transportation or after-sales-service fees and the incorporation of such fees in the contract price) amounted to a representation (namely a representation that the Notification form and contractual documentation disclosed all material terms upon which the goods were being exported to Iraq) which was false to the knowledge of the defendant; and

(d) DFAT was deceived by the false pretence in either (b) or (c) and was

influenced thereby to confer a benefit on the defendant *the benefit comprising either or both the certification and submission of the documents to the United Nations and the giving of permission to export the relevant goods to Iraq.

Sert ion ** "'/> //r ri "

Prior to its repeal effective 24 May 2001, section 29B of the Crimes Act provided as follows:

29B Any person who imposes or endeavours to impose upon the Commonwealth or any public authority under the Commonwealth by any untrue representation, made in any manner whatsoever, with a view to obtain money or any other benefit or advantage, shall be guilty of an offence.

The elements of the offence created by subsection 29B(1), relevant to the matter at hand, are as follows:

(1) the defendant;

(2) imposes (or endeavours to impose) upon the Commonwealth;

(3) by any untrue representation;

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(4 ) wit h a vie w t o obtainin g a benefit .

Th e menta l elemen t o f th e offenc e i s tha t th e defendan t kne w tha t fh e representatio n w a s untru e an d tha t th e representatio n wa s m a d e wit h th e objec t o r purpos e o f obtainin g th e benefit .

I n Bacon v Salamane^^, O w e n J spel t ou t th e element s o f th e offenc e i n th e followin g terms :

Th e necessar y element s o f th e offenc e i n a cas e suc h a s th e presen t ar e (1 ) tha t th e perso n charge d impose d upo n th e Commonwealt h o r upo n a publi c authorit y unde r th e Commonwealt h b y a n untru e representation , tha t i s t o sa y untru e t o th e knowledg e o f th e perso n charged ; an d (2 ) tha t th e representatio n wa s mad e wit h a vie w t o obtain , tha t i s t o sa y wit h th e objec t o r fo r th e purpos e o f obtaining , mone y o r som e othe r benefi t o r advantage .

Ther e i s a considerabl e overla p betwee n sectio n 29 B an d sectio n 29 A o f th e Crimes Act. Th e principa l difference s ar e tha t i n th e cas e o f sectio n 29 B i t i s no t necessar y t o prov e a n intentio n t o d e f r a u d o r tha t th e defendan t obtaine d anything , thoug h th e fac t tha t th e defendan t achieve d hi s ai m ma y b e relevan t i n establishin g tha t th e

Commonwealt h wa s impose d upon.'' ^

T o 'impos e u p o n ' mean s t o chea t o r wilfull y deceive^ ^ o r t o 'deceiv e o r ge t th e bette r of.'"' ^ I t follow s tha t i t i s a n elemen t o f th e offenc e tha t th e Commonwealt h wa s misle d o r deceive d b y th e untru e representation^o , thoug h i t i s no t necessar y t o prov e tha t th e Commonwealt h acte d i n relianc e o n th e representatioii.^ i A charg e o f endeavourin g t o impos e ma y cove r th e cas e wher e th e Commonwealt h wa s no t misle d o r deceive d b y

th e untru e representation . Th e elemen t o f 'endeavour ' i s simila r t o a n attempt .

Th e elemen t requirin g proo f o f a n untru e representatio n ha s bee n addresse d abov e i n th e contex t o f th e fals e pretenc e elemen t i n sectio n 29A . Th e meanin g o f 'benefit ' ha s als o bee n addresse d abov e i n th e contex t o f sectio n 29A .

Th e circumstance s i n whic h a compan y ma y b e criminall y liabl e i s addresse d i n detai l below . I n a cas e wher e a compan y i s charge d wit h a n offenc e unde r sectio n 29B , i t i s necessar y t o imput e t o th e compan y knowledge , possesse d b y on e o f it s officers , tha t th e relevan t representatio n wa s untrue . I t i s no t necessar y t o prove , however , tha t th e

office r w h o i n fac t conveye d th e representatio n t o th e Commonwealt h possesse d thi s knowledge . Thi s i s illustrate d b y th e decisio n i n Larnb v Toledo-Berkel Pty Ltd.^'^ Th e fact s o f tha t cas e wer e tha t a compan y secretary , o n behal f o f th e company , applie d t o th e Decima l Currenc y Boar d fo r compensatio n fo r th e conversio n o f certai n weighin g machines . Th e forema n o f th e compan y (Jackson ) responsibl e fo r th e conversion s ha d wilfull y faile d t o carr y ou t th e conversion s claimed . Th e secretar y an d director s o f th e compan y wer e unawar e tha t th e conversion s claime d h a d no t bee n carrie d out . O n appeal , th e convictio n o f th e compan y secretar y fo r a n offenc e unde r sectio n 29 B wa s quashe d an d i t wa s held , i n th e circumstances , tha t th e guilt y knowledg e o f th e forema n coul d no t b e impute d t o th e company . Stark e J stated :

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The only untrue representation made in this case on the facts was contained in the certificates signed by the secretary. The Magistrate has held, in effect, that his actions were innocent. But this finding in other circumstances, I think, would not be decisive. If the directors had decided to impose on the Commonwealth with full knowledge, or if the guilty knowledge of lackson could have been imputed to the company, the fact that the actual authorised officer of the company was unaware of the untruthfulness of the representation could not, in my opinion, constitute a defence. It would, in those circumstances, be proved that the company imposed or endeavoured to impose on the Commonwealth by an untrue representation, and provided it was proved that the thing was done with a view to obtaining money or any other benefit or advantage, the offence would be complete. The mere fact that the representor was an innocent pawn would, in my judgment, be irrelevant. 75

The circumstances in which knowledge can be imputed to a company are addressed below.

In the present context, the offence of imposing or endeavouring to impose upon the Commonwealth contrary to section 29B of the Crimes Act may be made out if the evidence is capable of demonstrating the following:

(a) the Notification form and contractual documents submitted by the company to DFAT contained, to the knowledge of the defendant, an untrue

representation; or

(b) the conduct of the company in submitting fhe document to DFAT together with its failure to disclose to DFAT other material facts (for example other collateral arrangements with Iraq relating to the payment of inland transportation or after-sales-service fees and the incorporation of such fees in the contract price) amounted to a representation (namely a representation that the Notification form and contractual documentation disclosed all material terms upon which the goods were being exported to Iraq) which was untrue to the knowledge of the defendant; and

(c) the untrue representation constituted by either (a) or (b) was made by the defendant (either one of the relevant companies or their officers) with the object or for the purpose of obtaining a benefit from DFAT *the benefit comprising either or both the certification and submission of the documents to the United Nations and the giving of permission to export the relevant goods to Iraq.

If the defendant was charged with imposing on the Commonwealth, it would also be necessary to prove that the Commonwealth was deceived by the untrue

representation in either (a) or (b). This would not be necessary if the defendant was charged only with endeavouring to impose on the Commonwealth.

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\cccssoriiil liíü'ilitu tiini coimpiraci/

Subsectio n 5(1 ) o f th e Crime s Ac t provide s a s follows :

5 (1 ) An y perso n wh o aids , abets , counsel s o r procures , o r b y ac t o r omissio n i s i n an y wa y directl y o r indirectl y knowingl y concerne d in , o r part y to , th e commissio n o f an y offenc e agains t an y la w o f th e Commonwealth , whethe r passe d befor e o r afte r th e commencemen t o f thi s Act , shal l b e deeme d t o hav e committe d tha t offenc e an d shal l b e punishabl e accordingly .

Sectio n 5(1 ) doe s no t creat e a separat e offence . Rathe r a defendan t wh o aids , abets , counsel s o r procure s o r i s knowingl y concerne d i n th e commissio n o f a n offenc e b y anothe r perso n i s deeme d t o hav e committe d th e substantiv e offence.^ ^ Th e penalt y applicabl e fo r th e substantiv e offenc e accordingl y i s applicable .

Th e word s 'aids , abets , counsel s o r procures ' ar e descriptiv e o f a singl e concep t tha t involve s th e 'genera l idea , tha t th e perso n charge d a s a principa l i n th e secon d degre e i s i n som e wa y linke d i n purpos e wit h th e perso n actuall y committin g th e crim e an d i s b y hi s word s o r conduc t doin g somethin g t o brin g about , o r renderin g mor e likely , suc h c o m m i s s i o n . T h e definitio n o f 'knowingl y concerned ' raise s th e questio n 'whethe r o n th e fact s i t ca n reasonabl y b e sai d tha t th e ac t o r omissio n show n t o hav e bee n don e o r neglecte d t o b e don e b y th e defendan t doe s i n trut h implicat e o r involv e hi m i n th e offence , whethe r i t doe s sho w a practica l connectio n betwee n hi m an d th e offence.'^ ® A perso n doe s no t becom e criminall y involve d i n a n unlawfu l ac t b y mean s o f knowledg e only ; som e ac t o r conduc t o n hi s par t i s necessary . A n accessor y mus t b e 'concerne d in ' an d no t merel y 'concerne d about ' th e offence.^ ^ j ^ e necessar y knowledg e tha t mus t b e prove d i s knowledg e o f al l o f th e essentia l element s o f th e principa l offence.^^ ^

I n orde r t o establis h tha t a perso n i s a n accessor y t o th e commissio n o f a n offenc e b y anothe r perso n (th e principa l offender ) i t mus t b e establishe d tha t

 th e principa l offende r committe d th e offenc e

 th e accessor y kne w al l th e essentia l fact s whic h mus t b e establishe d i n orde r t o sho w tha t th e offenc e wa s committe d b y th e principa l offende r (whethe r o r no t th e accessor y kne w tha t thos e fact s amounte d t o a n offence )

 wit h tha t knowledge , th e accessor y intentionall y assiste d o r encourage d th e principa l offende r t o carr y ou t th e act s tha t constitut e th e principa l offence .

O f potentia l relevanc e t o th e presen t circumstance s i s that , wher e a compan y i s allege d t o b e th e principa l offender , a n office r o f th e compan y ca n b e convicte d o f aidin g an d abettin g o r bein g knowingl y concerne d i n th e commissio n o f th e company' s offenc e eve n whe n i t i s th e act s o f th e office r whic h ar e th e basi s o f th e crimina l liabilit y o f th e c o m p a n y . I t follow s tha t i f a n office r o f on e o f th e relevan t companie s wa s responsibl e fo r misleadin g o r deceivin g th e Commonwealt h i n an y o f th e way s covere d b y section s 29A , 29 B o r 29 D o f th e Crime s Act , s o lon g a s tha t

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officer' s action s an d knowledg e ca n b e impute d t o th e compan y (a s t o whic h se e furthe r below) , th e compan y ca n b e charge d a s principa l offende r an d th e office r a s a n accessory .

A t al l relevan t time s u p t o th e hm e o f it s repea l o n 2 4 Ma y 2001 , subsectio n 86(1 ) o f th e Crime s Ac t provide d a s follows :

8 6 (1 ) A perso n wh o conspire s wit h anothe r perso n t o commi t a n offenc e agains t a la w o f th e Commonwealt h punishabl e b y imprisonmen t fo r mor e tha n 1 2 months , o r b y a fin e o f 20 0 penalt y unit s o r more , i s guilt y o f a n offenc e o f conspirac y t o commi t tha t offenc e an d i s punishabl e a s i f th e offenc e t o whic h th e conspirac y relate s ha d bee n committed .

Th e element s o f th e offenc e o f conspirac y t o commi t a Commonwealt h offence , a s se t ou t i n subsectio n 86(3) , ar e that :

(1 ) th e defendan t entere d int o a n agreemen t wit h on e o r mor e othe r persons ; an d

(2 ) th e defendan t an d a t leas t on e othe r part y t o th e agreemen t mus t hav e intende d tha t a n offenc e woul d b e committe d pursuan t t o th e agreement ; an d

(3 ) th e defendan t an d a t leas t on e othe r part y t o th e agreemen t mus t hav e committe d a n over t ac t (a n ac t i n furtheranc e o f th e conspiracy ) pursuan t t o th e agreement .

O f potentia l importanc e t o th e presen t circumstance s i s tha t subsectio n 86(4 ) provide s tha t a perso n ma y b e foun d guilt y o f a conspirac y eve n i f th e onl y othe r part y t o th e agreemen t i s a bod y corporate . I t follow s tha t i f a n office r o f on e o f th e relevan t companie s tha t entere d int o a n agreemen t wit h th e compan y to , say , defrau d th e Commonwealt h b y misleadin g a n office r o f DFA T an d caus e the m t o d o somethin g the y otherwis e woul d no t hav e don e (fo r example , certif y an d submi t th e company' s document s t o th e Unite d Nations) , bot h th e office r an d th e compan y ma y b e convicte d o f conspirac y t o commi t th e offenc e o f defraudin g th e Commonwealt h contrar y t o sectio n 29 D o f th e Crimes Act.

Commonwealt h provisions—conduc t afte r 2 4 Ma y 200 1

Effectiv e 2 4 Ma y 2001 , eac h o f th e foregoin g offence s o f frau d o r decei t wa s repeale d an d replace d b y a numbe r o f cognat e offence s i n Part s 7. 3 an d 7. 4 o f th e Criminal Code. Th e offence s i n thes e Part s cove r a broa d rang e o f conduc t involvin g fraudulen t conduc t toward s th e Commonwealth , obtainin g propert y o r financia l benefit s fro m th e Commonwealt h b y deception , th e makin g o f fals e o r misleadin g statement s i n application s t o th e Commonwealt h an d th e provisio n o f fals e o r misleadin g informatio n o r document s t o th e Commonwealt h i n certai n circumstances .

No t al l o f th e offence s create d b y Part s 7. 3 an d 7. 4 ar e applicabl e o r apposit e t o th e presen t facts . A numbe r o f th e offenc e provision s contai n element s that , o n an y vie w o f th e facts , ar e unlikel y t o b e established .

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Th e offenc e o f obtainin g propert y belongin g t o th e Commonwealt h b y deceptio n i n sectio n 134. 1 i s no t apposit e becaus e th e benefit s o r advantage s obtaine d fro m th e Commonwealt h b y th e relevan t companie s (th e certificatio n an d submissio n o f thei r document s t o th e Unite d Nation s an d th e grantin g o f permissio n t o expor t unde r th e Customs (Prohibited Exports) Regulations) coul d no t readil y b e regarde d a s 'property ' a s define d i n sectio n 130. 1 o f th e Crimina l Code , despit e th e fac t tha t th e definitio n

include s ' a thin g i n actio n o r othe r intangibl e property. ' Th e definitio n o f 'property ' i n th e crimina l cod e i s no t sufficientl y broa d a s t o encompas s th e sor t o f 'benefits ' tha t wer e previousl y covere d b y sectio n 29 B o f th e Crime s Act . Th e sam e proble m arise s i n relatio n t o th e genera l dishonest y offenc e i n sectio n 135.1 , whic h require s proo f tha t th e defendan t intende d dishonestl y t o obtai n a 'gain ' fro m th e Commonwealth . Tha t i s becaus e 'gain ' i s define d i n sectio n 130. 1 a s meanin g a gai n i n propert y o r a gai n b y wa y o f th e suppl y o f services ; th e proble m agai n bein g tha t th e relevan t benefit s intende d t o b e gaine d wer e no t gain s i n relatio n t o properl y a s defined .

No r coul d th e benefit s obtaine d fro m DFA T readil y b e regarde d a s constitutin g a 'financia l advantage ' fo r th e purpos e o f th e offenc e o f obtainin g a financia l benefi t b y deceptio n create d b y sectio n 134.2 , o r th e offenc e o f obtainin g a financia l advantag e create d b y sectio n 135. 2 o f th e Criminal Code. Th e phras e 'financia l advantage ' i s no t define d i n th e Crimina l Code . Whils t i t ha s bee n held , i n th e contex t o f cognat e Stat e offenc e provisions , tha t th e word s 'financia l advantage ' shoul d b e give n thei r plai n meanin g an d no t b e narrowl y construed , i t i s difficul t t o se e ho w th e intangibl e benefit s obtaine d b y th e companie s fro m DFA T coul d b e considere d t o constitut e a financia l advantage . Whils t ultimatel y th e companie s n o doub t benefite d financiall y fro m bein g abl e t o expor t th e goods , tha t financia l advantag e i s quit e remot e fro m th e immediat e benefit s obtaine d fro m DFAT . Th e difficult y agai n i s tha t th e phras e 'financia l advantage ' i s no t a s broa d a s th e wor d 'benefit ' tha t wa s previousl y use d i n sectio n 29 B o f th e Crimes Act t o cove r non-financia l benefit s o r advantages .

Consideratio n ha s als o bee n give n t o th e offence s create d b y section s 137. 1 an d 137.2 , Th e difficult y wit h th e offenc e i n sectio n 137.1(1 ) i s that , whils t b y reaso n o f subparagrap h (c)(i ) i t cover s th e provisio n o f informatio n t o a Commonwealt h entit y tha t i s fals e o r misleadin g o r misleadin g b y omission , th e offenc e i s no t mad e ou t if , befor e th e informatio n wa s give n b y a perso n t o th e Commonwealt h entity , th e Commonwealt h entit y di d no t tak e reasonabl e step s t o infor m th e perso n o f th e existenc e o f th e o f f e n c e . S u b s e c t i o n 137.1(6 ) provide s tha t i t i s sufficien t fo r th e purpos e o f subsectio n 137.1(4 ) fo r th e word s 'givin g o f fals e informatio n i s a seriou s offence ' t o b e used . A s discusse d i n Chapte r 12 , DFA T di d no t requir e th e relevan t companie s t o fil l ou t an y form , le t alon e a for m tha t include d th e word s specifie d i n subsectio n 137.1(6) . No r i s ther e an y evidenc e t o sugges t tha t DFA T too k an y othe r step s t o advis e th e companie s o f th e existenc e o f th e offenc e i n sectio n 137.1(1) . Th e sam e difficult y applie s i n relatio n t o th e offenc e unde r sectio n 137.1(1 ) tha t applie s b y reaso n o f subparagrap h (l)(c)(ii) . Th e offenc e i n sectio n 137. 1 tha t applie s b y reaso n o f subparagrap h (l)(c)(iii ) doe s no t appl y becaus e th e informatio n wa s no t give n i n

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complianc e o r purporte d complianc e wit h a la w o f th e Commonwealth.^ ^ Th e sam e difficult y render s th e offenc e i n sectio n 137. 2 inapplicable .

Th e offence s i n Part s 7. 3 an d 7. 4 o f th e Criminal Code tha t potentiall y appl y t o th e fac t situatio n an d tha t ar e mos t apposit e ar e th e offence s i n subsectio n 135.1(7) , 135.4(7 ) an d subsection s 136.1(1 ) an d (4) .

Sidfsectioii 7,15.7(7 ) of the Code— influencing a Commonxvealth ptddic officinl

Subsection s 135.1(7 ) an d (8 ) o f th e Crimina l Code s provide s a s follows :

Influencin g a Commonwealt h publi c officia l

(7 ) A perso n i s guilt y o f a n offenc e if :

(a ) th e perso n doe s anythin g wit h th e intentio n o f dishonestl y influencin g a publi c officia l i n th e exercis e o f th e official' s dutie s a s a publi c official ; an d

(b ) th e publi c officia l i s a Commonwealt h publi c official ; an d

(c ) th e dutie s ar e dutie s a s a Commonwealt h publi c official .

(8 ) I n a prosecutio n fo r a n offenc e agains t subsectio n (7) , i t i s no t necessar y t o prov e tha t th e defendan t knew :

(a ) tha t th e officia l wa s a Commonwealt h publi c official ; o r

(b ) tha t th e dutie s wer e dutie s a s a Commonwealt h publi c official .

Thi s offenc e i s simila r t o th e specie s o f frau d tha t involve s deceivin g a publi c officia l int o doin g somethin g tha t th e officia l woul d no t otherwis e hav e don e (considere d abov e i n th e contex t o f sectio n 29 D o f th e Crime s Act) . Th e element s o f th e offenc e are :

(1 ) th e perso n doe s anything ;

(2 ) wit h th e intentio n o f dishonestl y influencing ;

(3 ) a Commonwealt h publi c officia l

(4 ) i n th e exercis e o f th e official' s dutie s a s a Commonwealt h publi c official .

Th e firs t elemen t i s extremel y broad . I t comprise s th e 'physica l element ' o f th e offence^ 4 woul d appea r t o cove r virtuall y an y conduc t —feasanc e o r non -feasance.^ ^ Relevantl y i t woul d cove r th e failur e t o disclos e informatio n tha t wa s material , o r potentiall y materia l t o a Commonwealt h publi c official' s duties , o r th e

provisio n o f informatio n tha t wa s materiall y misleadin g b y reaso n o f th e omissio n t o refe r t o othe r information .

I n relatio n t o th e secon d element , 'dishonest ' i s define d i n sectio n 130. 3 o f th e Criminal Code t o mea n dishones t accordin g t o th e standard s o f ordinar y peopl e an d k n o w n b y

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th e defendan t t o b e disliones t accordin g t o th e standard s o f ordinar y hones t people . Th e referenc e t o 'intention ' i n thi s elemen t mean s that , b y reaso n o f sectio n 5. 2 o f th e Criììiiiial Code, thi s elemen t constitute s th e 'faul t element ' o f th e offence . Subsectio n 5.2(1 ) provide s tha t a perso n ha s intentio n wit h respec t t o conduc t i f h e o r sh e mean s

t o engag e i n tha t conduct . Accordingly , i t i s necessar y t o prov e tha t th e defendan t b y hi s conduc t mean t dishonestl y t o influence . I t i s no t a n elemen t o f th e offenc e tha t th e Commonwealt h office r wa s i n fac t influenced ,

'Commonwealt h pubH c official ' i s define d i n th e Dictionar y i n th e Criminal Code an d includes , relevantly , a n Australia n Publi c Servic e employe e o r an y othe r individua l employe d b y th e Commonwealth . 'Duty ' i s define d i n sectio n 130. 1 a s meaning , i n relatio n t o a perso n wh o i s a Commonwealt h publi c official , an y authority , duty , functio n o r powe r tha t i s conferre d o n th e perso n a s a Commonwealt h publi c official , o r th e perso n hold s himsel f o r hersel f ou t a s havin g a s a Commonwealt h publi c official .

I n th e presen t context , th e offenc e o f influencin g a Commonwealt h publi c officia l contrar y t o subsectio n 135.1(7 ) o f th e Criminal Code wil l b e mad e ou t i f th e defendan t (AWB , Rhin e Ruh r o r Alkaloid s o r th e relevan t officer s involve d i n th e conduct^^) , di d

anythin g wit h th e intentio n o f dishonestl y influencin g a n office r o f DFA T i n th e cours e o f tha t officer s dutie s a s a Commonwealt h publi c official . Fo r practica l purposes , th e offenc e woul d b e mad e ou t i f th e availabl e evidenc e wa s capabl e o f

provin g that :

(a ) th e Notificatio n for m o r an y o f th e accompanyin g documentatio n submitte d t o DFA T contained , t o th e knowledg e o f th e defendant , eithe r a materiall y fals e o r misleadin g statemen t o r statement s o r omitte d fro m i t a matte r o r thin g tha t rendere d th e informatio n i n th e documentatio n misleadin g i n a materia l respect ; o r

(b ) th e defendan t faile d t o disclos e o r conceale d fro m DFA T fact s tha t wer e o r ma y hav e bee n materia l t o th e dut y bein g performe d b y th e DFA T office r (fo r example , tha t th e relevan t arrangement s wit h th e Iraq i entit y include d a collatera l arrangemen t t o pa y a n inlan d transpor t fe e o r after-sales-servic e fe e whic h fe e wa s incorporate d i n th e contrac t price) ; an d

(c ) i n engagin g i n th e conduc t i n eithe r (a ) o r (b) , th e defendan t intende d t o dishonestl y influenc e th e DFA T office r int o eithe r forwardin g document s t o th e Unite d Nation s o r causin g a delegat e o f th e Ministe r t o sig n a Permissio n t o Expor t i n circumstance s where , bu t fo r th e deceit , th e office r woul d no t hav e take n tha t action .

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Siihscctiol! I ').).4(7) of tJic L iuic — coiisf'iriiig to influciicc o Loiinuomrcaitii [uihJic

off idol

Subsectio n 135.4(7 ) o f th e Crimina l Cod e i n effec t create s a n offenc e o f conspirin g t o commi t th e offenc e o f influencin g a Commonwealt h publi c officia l tha t ha s jus t bee n discussed . Subsectio n 135.4(7 ) provide s a s follows :

Influencin g a Commonwealt h publi c officia l

(7 ) A perso n i s guilt y o f a n offenc e if :

(a ) th e perso n conspire s wit h anothe r perso n wit h th e intentio n o f dishonestl y influencin g a publi c officia l i n th e exercis e o f th e official' s dutie s a s a publi c official ; an d

(b ) th e publi c officia l i s a Commonwealt h publi c official ; an d

(c ) th e dutie s ar e dutie s a s a Commonwealt h publi c official .

(8 ) I n a prosecutio n fo r a n offenc e agains t subsectio n (7) , i t i s no t necessar y t o prov e tha t th e defendan t knew :

(a ) tha t th e officia l wa s a Commonwealt h publi c official ; o r

(b ) tha t th e dutie s wer e dutie s a s a Commonwealt h publi c official .

I t i s unnecessar y spel l ou t th e element s o f thi s offence , whic h ar e effectivel y th e sam e a s th e offenc e u n d e r subsectio n 135.4(7 ) excep t tha t th e physica l elemen t o f th e offenc e i s conspirin g wit h anothe r perso n rathe r tha n 'doe s anything' . Th e requirement s o f th e conspirac y elemen t ar e se t ou t i n subsection s 135.4(9 ) t o (13 ) i n term s simila r t o sectio n 8 6 o f th e Crime s Ac t an d include :

(a ) th e defendan t entere d int o a n agreemen t wit h on e o r mor e othe r persons ; an d

(b ) th e defendan t an d a t leas t on e othe r part y t o th e agreemen t mus t hav e intende d t o d o 'th e thing ' pursuan t t o th e agreement ; an d

(c ) th e defendan t an d a t leas t on e othe r part y t o th e agreemen t mus t hav e committe d a n over t ac t (a n ac t i n furtheranc e o f th e conspiracy ) p u r s u a n t t o th e agreement ; an d

(d ) a perso n ma y b e foun d guilt y o f a conspirac y eve n i f th e onl y othe r part y t o th e agreemen t i s a bod y corporate .

Scctioii iMhl of the Criiiiinnl Code— I tilsc or misleading statements in applications

Sectio n 136. 1 o f th e Criminal Code create s tw o offence s relatin g t o th e makin g o f fals e statement s t o th e Commonwealt h i n applicahons : a n offenc e requirin g proo f o f knowledg e i n subsectio n 136.1(1 ) an d a n offenc e requirin g onl y proo f o f recklessnes s i n subsectio n 136.1(4) .

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Subsectio n 136.1(1 ) provide s a s follows :

Knowledg e

(1 ) A perso n i s guilt y o f a n offenc e if :

(a ) th e perso n make s a statemen t (whethe r orally , i n a documen t o r i n an y othe r way) ; an d

(b ) th e perso n doe s s o knowin g tha t th e statement :

(¡ ) i s fals e o r misleading ; o r

(ii ) omit s an y matte r o r thin g withou t whic h th e statement s i s misleading ; an d

(c ) th e statemen t i s mad e in , o r i n connectio n with :

(i ) a n applicatio n fo r a licence , permi t o r authority ; o r

(ii ) a n applicatio n fo r registration ; o r

(iii ) a n applicatio n o r clai m fo r a benefit ; an d

(d ) an y o f th e followin g subparagraph s applies :

(i ) th e statemen t i s mad e t o a Commonwealt h entity ;

(ii ) th e statemen t i s mad e t o a perso n wh o i s exercisin g power s o r performin g function s under , o r i n connectio n with , a la w o f th e Commonwealth ;

(iii ) th e statemen t i s mad e i n complianc e o r purporte d complianc e wit h a la w o f th e Commonwealth .

Subsectio n 136. 1 (lA)® ^ provide s tha t absolut e liabilit y applie s t o eac h o f subparagraph s (l){d)(i) , (ii ) an d (iii) , meanin g tha t i t i s unnecessar y t o prov e tha t th e defendan t kne w an y o f th e matter s i n thos e paragraphs . Subsection s 136.1(2 ) an d (3 ) provide , i n effec t (an d i n combinatio n wit h sectio n 13.3) , tha t i t i s a defenc e i f th e defendan t adduce s (o r i s abl e t o poin t to ) evidenc e tha t suggest s a reasonabl e possibilit y tha t th e statemen t wa s no t fals e o r misleadin g i n a materia l particular , o r tha t th e statemen t di d no t omi t a matte r o r thin g withou t whic h th e statemen t wa s

misleading , a s th e cas e ma y be .

Th e element s o f th e offenc e create d b y subsectio n 136.1 , relevan t t o th e matte r a t hand , ar e a s follows :

(1 ) th e defendan t make s a statemen t (eithe r orally , i n a documen t o r i n an y othe r way) ;

(2 ) knowin g tha t th e statemen t either :

(a ) i s fals e o r misleadin g i n a materia l particular ; o r

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(b ) omit s fro m i t a matte r o r thin g withou t whic h th e statemen t i s misleading ;

(3 ) th e statemen t i s mad e i n connectio n wit h a permi t o r authority ; an d

(4 ) th e statemen t i s mad e t o a Commonwealt h entity .

I n relatio n t o elemen t (1) , i t i s clea r fro m th e word s o f th e sectio n tha t th e statemen t ma y b e mad e i n an y way . Thi s encompasse s no t onl y writte n o r ora l statements , bu t als o statement s tha t ar e implie d fro m conduct , includin g i n som e circumstance s silence , o r fro m a combinatio n o f writin g an d conduct.^ ^ I n th e presen t matter , th e submissio n t o DFA T o f a Notificatio n for m an d accompanyin g contractua l document s

is , i n al l th e circumstances , capabl e o f bein g construe d a s a n implie d statemen t tha t th e documentatio n disclose d al l relevan t term s o f th e arrangement s betwee n th e relevan t compan y an d th e Iraq i entit y an d tha t ther e wer e n o collatera l o r associate d arrangements .

Elemen t (2 ) i s th e faul t elemen t o f th e offence . Sectio n 5. 3 o f th e Criminal Code provides , i n relatio n t o a faul t elemen t tha t consist s o f knowledge , tha t a perso n ha s knowledg e o f a circumstanc e o r resul t i f h e o r sh e i s awar e tha t i t exist s o r wil l exis t i n

th e ordinar y cours e o f events .

Elemen t (3 ) require s proo f tha t th e statemen t wa s m a d e i n connectio n with , relevantly , a permi t o r authority . Proo f tha t th e relevan t statemen t wa s mad e i n cormectio n wit h a permissio n t o expor t unde r th e Customs (Prohibited Exports) Regulations woul d satisf y thi s element . I n th e circumstance s o f thi s matter , a n issu e arise s whethe r th e submissio n o f th e Notificatio n for m an d accompanyin g contractua l document s t o DFAT , fo r th e purpos e o f havin g DFA T certif y th e Notificatio n for m an d submi t th e document s t o th e Unite d Nation s wa s don e 'i n connectio n with ' a n applicatio n fo r permissio n t o export . Th e word s 'i n connectio n with ' mea n a relatio n betwee n on e thin g an d another^ ^ an d generall y hav e a ver y wid e o p e r a t i o n , Chapte r 1 2 discusse s DFAT' s rol e i n th e Oil-for-Foo d Programme , th e procedure s tha t DFA T adopte d an d th e connectio n betwee n th e submissio n b y a compan y o f a Notificatio n for m an d contractua l documents . Unite d Nation s approva l o f paymen t unde r th e Programm e an d th e signin g o f Permissio n t o Export . Suffic e i t t o sa y tha t th e procedur e wa s suc h tha t i t i s ope n t o conclud e tha t th e submissio n o f th e Notificatio n for m an d contractua l document s t o DFA T b y a compan y wa s (an d wa s know n t o be ) i n connectio n wit h th e grantin g o f permissio n t o export .

A s fo r elemen t (4) , 'Commonwealt h entity ' i s define d i n th e Dictionar y t o th e Crimina l Cod e a s comprisin g th e Commonwealt h o r a Commonwealt h authority , an d 'Commonwealt h authorit y i s define d a s meanin g a bod y establishe d unde r th e la w o f th e C o m m o n w e a l t h ' b u t no t includin g som e bodie s tha t ar e no t presentl y relevant .

Elemen t (4 ) o f th e offenc e woul d b e m a d e ou t o n th e basi s tha t DFA T i s a

Commonwealt h entit y a s defined .

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I n th e presen t context , th e offenc e o f makin g a fals e o r misleadin g statemen t i n a n applicatio n contrar y t o subsectio n 136.1(1 ) o f th e Criininal Code wil l b e mad e ou t i f th e evidenc e i s capabl e o f demonstratin g th e following :

(a ) th e Notificatio n for m an d contractua l document s submitte d b y th e compan y t o DFA T contained , t o th e knowledg e o f th e defendan t (th e compan y o r it s officers) , a statemen t tha t w a s fals e o r misleading , o r ha d omitte d f r o m i t a matte r o r thin g tha t rendere d th e statemen t misleading ; o r

(b ) th e conduc t o f th e compan y i n submittin g th e documen t t o DFA T togethe r wit h it s failur e t o disclos e t o DFA T othe r materia l fact s (fo r exampl e othe r collatera l arrangement s wit h Ira q relatin g t o th e paymen t o f inlan d transportatio n o r after-sales-servic e fee s an d th e incorporatio n o f suc h fee s i n th e contrac t price ) amounte d t o a statemen t (fo r exampl e a n implie d statemen t tha t th e Notificatio n for m an d contractua l documentatio n disclose d al l materia l term s u p o n whic h th e good s wer e bein g exporte d t o Iraq ) whic h wa s fals e o r misleadin g t o th e knowledg e o f th e defendant ; an d

(c ) th e statemen t i n (a ) o r (b ) (th e submissio n o f th e document s t o DFAT ) wa s m a d e i n connectio n wit h a permissio n t o expor t th e good s th e subjec t o f th e contrac t pursuan t t o th e Customs (Prohibited Exports) Regulations;

Subsectio n 136.1(4 ) create s a simila r offence , bu t wit h th e lesse r 'fault ' elemen t o f recklessness . I t provide s a s follows :

Recklessnes s

( 1 ) A perso n i s guilt y o f a n offenc e if :

(a ) th e perso n make s a statemen t (whethe r orally , i n a documen t o r i n an y othe r way) ; an d

(b ) th e perso n doe s s o reckles s a s t o whethe r th e statement :

(i ) i s fals e o r misleading ; o r

(ii ) omit s an y matte r o r thin g withou t whic h th e statemen t i s misleading ; an d

(c ) th e statemen t i s mad e in , o r i n connectio n with ;

(i ) a n applicatio n fo r a licence , permi t o r authority ; o r

(ii ) a n applicatio n fo r registration ; o r

(iii ) a n applicatio n o r clai m fo r a benefit ; an d

(d ) an y o f th e followin g subparagraph s applies :

(i ) th e statemen t i s mad e t o a Commonwealt h entity ;

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(ii) the statement is made to a person who is exercising powers or performing functions under, or in connection with, a law of the Commonwealtii;

(iii) the statement is made in compliance or purported compliance with a law of the Commonwealth.

Subsections 136.1 (4A), (5) and (6) are relevantly in the same terms as subsections 136.1(1 A), (2) and (3) considered a b o v e.

As stated, the only difference between this offence and the offence in subsection (1) is that, instead of proving that the defendant knew that the relevant statement was false or misleading, it is necessary to prove only that the defendant was reckless as to whether or not that was the case. Recklessness in relation to a circumstance *here that the relevant statement was false or misleading *is defined in section 5.4 of the Criminal Code in the following terms:

(1) A person is reckless with respect to a circumstance if:

(a) he or she is aware of a substantial risk that the circumstance exists or will exist; and

(b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk.

In the present case it would be necessary fo prove that the defendant:

(a) knew there was a substantial risk either that the Notification form or contractual documents submitted to DFAT contained a false or misleading statement (or a statement that was misleading by omission) or that the implied statement made as a result of the submission of the documents (that the documents set out the entirety of the arrangements between the company and Iraq) was false or misleading; and

(b) having regard to the circumstances known to the defendant, it was

unjustifiable to make the relevant statement.

Accessorial liabiliti/ iiiitler Ihe Criminal Code

Complicity or accessorial liabihty under the Criminal Code is dealt with in section 11.2. It is in similar terms to section 5 of the Crimes Act, however it does not include 'knowingly concerned' as a basis for accessorial liability. It provides as follows:

(1) A person who aids, abets, counsels or procures the commission of an offence by another person is taken to have committed that offence and is punishable accordingly.

The requirements of proof of accessorial liabihty are set out in subsection 11.2(3) and (4), which provide that a person cannot be guilty unless the following matters are established:

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(a ) th e person' s conduc t i n fac t aided , abetted , counselle d o r procure d th e commissio n o f th e offenc e b y th e othe r person ; an d

(b ) th e offenc e wa s committe d b y th e othe r person ; an d

(c ) th e defendan t intende d tha t thei r conduc t woul d aid , abet , counse l o r procur e th e commissio n o f an y offenc e (includin g it s faul t elements ) o f th e typ e th e othe r perso n committed ; o r

(d ) th e defendan t intende d tha t thei r conduc t woul d aid , abet , counse l o r procur e th e commissio n o f a n offenc e an d wa s reckles s abou t th e commissio n o f th e offenc e (includin g it s faul t elements ) tha t th e othe r perso n i n fac t committed .

Ther e i s als o a genera l conspirac y provisio n i n sectio n 11. 5 o f th e Crimina l Code . Sectio n 11. 2 o f th e Crimina l Cod e create s th e offenc e o f attemptin g t o commi t a n offence .

Relevan t Stat e offenc e provision s

I f an y o f th e action s o f th e relevan t companie s (AWB , Rhin e Ruh r o r Alkaloids ) amounte d t o fraud , decei t o r dishonestl y toward s a perso n o r entit y othe r tha n th e Commonwealth , th e relevan t offenc e provision s ar e t o b e foun d i n Stat e legislation . Th e onl y relevan t non-Commonwealt h victi m o r objec t o f an y allege d fraudulen t activit y b y an y o f th e companie s wa s th e Unite d Nations .

Variou s Stat e offence s woul d potentiall y b e relevan t i f th e availabl e evidenc e wa s capabl e o f establishin g that :

(a ) th e document s tha t th e relevan t companie s cause d DFA T t o submi t t o th e Unite d Nation s deceive d th e Unite d Nation s because , fo r example , the y di d no t disclos e th e existenc e o f collatera l arrangement s betwee n th e compan y an d Ira q t o th e effec t tha t th e compan y woul d pa y Ira q inlan d transportatio n o r after-sales-servic e fee s tha t wer e incorporate d i n th e contrac t price ; an d

(b ) a s a resul t o f tha t deception , th e Unite d Nation s approve d th e contrac t fo r paymen t an d i n du e cours e authorise d paymen t ou t o f th e Unite d Nation s controlle d escro w account ;

I n relatio n t o th e recoupmen t o f th e Tigri s deb t Chapte r 27 , stat e offence s ma y b e relevan t i f th e availabl e b e evidenc e wa s capabl e o f establishin g that :

(a ) th e Notificatio n an d contrac t document s tha t AW B cause d DFA T t o submi t t o th e Unite d Nation s i n relatio n t o contract s 167 0 an d 168 0 di d no t disclos e tha t th e contrac t pric e ha d bee n inflate d t o provid e fo r th e paymen t o f a pas t deb t b y Ira q (sinc e assigne d t o Tigris) ;

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(b ) a s a result , th e Unite d Nation s wa s deceive d an d approve d th e contrac t an d authorise d paymen t ou t o f th e Unite d Nation s controlle d escro w account .

Th e variou s Stat e Crime s Act s an d Code s al l contai n offence s whic h ma y b e describe d shortl y a s obtainin g propert y o r financia l advantage s b y d e c e p t i o n . A n offenc e wil l onl y b e committe d unde r a particula r Stat e Act , however , wher e ther e ca n b e show n t o b e a loca l featur e o r relevan t lin k betwee n th e Stat e an d th e commissio n o f th e offence . A t commo n la w th e natur e o f th e require d lin k depende d o n whethe r th e offenc e i n questio n wa s a 'conduct ' crim e o r a 'result ' crime.'*- ! x^ g offenc e o f obtainin g propert y o r financia l advantage s b y fals e pretence s o r deceptio n i s a resul t crim e an d th e offenc e i s committe d an d triabl e i n th e plac e wher e th e obtainin g occurred , rathe r tha n th e plac e wher e th e deceptio n o r fals e pretenc e wa s p r a c t i s e d . H o w e v e r , a numbe r o f Stat e Act s provid e fo r extra-territorialit y i n relatio n t o offence s o f frau d o r dishonesty .

Becaus e AWB' s office s wer e i n Victoria , an y benefi t fro m an y deceptiv e o r fraudulen t ac t i s likel y t o hav e bee n received , directl y o r indirectly , i n Victoria . I f relevant , an y ac t o f frau d o r decei t practise d b y it s officer s i s als o likel y t o hav e bee n communicate d

fro m Victoria . Tha t i s likel y t o provid e a sufficien t jurisdictiona l nexu s fo r th e applicatio n o f th e Crime s Ac t 195 8 (Vic) . Th e sam e applie s t o Rhin e Ruhr , wherea s th e office s o f th e agen t o f Alkaloid s wh o wa s primaril y responsibl e fo r matter s associate d wit h th e Iraq i contrac t wer e i n Sydney . Becaus e o f th e likel y applicabilit y o f th e

Victoria n provision s i n mos t relevan t cases , th e relevan t provision s o f th e Victoria n Crime s Ac t wil l b e considered . Ther e ar e cognat e provision s i n th e othe r States .

Sectio n 82(1 ) o f th e Victoria n Crime s Ac t a t th e relevan t tim e provide d a s follows :

8 2 (1 ) A perso n wh o b y an y deceptio n dishonestl y obtain s fo r himsel f o r anothe r an y financia l advantag e i s guilt y o f a n indictabl e offenc e an d liabl e t o leve l 5 imprisonmen t (1 0 year s maximum) .

Th e element s o f thi s offenc e are :

(1 ) th e defendant , b y a deception ;

(2 ) dishonestly ;

(3 ) obtain s fo r himself , o r anothe r person , a financia l advantage .

'Deception ' i s define d i n subsectio n 81(4 ) a s includin g an y deceptio n (whethe r deliberat e o r reckless ) b y word s o r conduc t a s t o fac t o r a s t o law , includin g a deceptio n a s t o th e presen t intention s o f th e perso n usin g th e deceptio n o r an y othe r person . A deceptio n almos t invariabl y involve s a fals e o r misleadin g representatio n that , a s discusse d abov e i n th e contex t o f sectio n 29 A o f th e Commonwealt h Crime s Act , ma y b e mad e i n writing , b y word s o r b y conduc t o r b y a combinatio n o f thos e matters , an d ma y b e implied . Th e definitio n o f deceptio n i n subsectio n 81(4 ) expand s

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th e commo n la w concep t o f fals e pretence s i n tha t i t cover s representation s abou t th e la w an d th e intention s o f th e perso n usin g th e deception .

I n relatio n t o elemen t (2) , th e questio n whethe r a particula r ac t o f deceptio n i s dishones t depend s o n th e knowledge , belie f an d inten t o f th e defendan t an d i s t o b e determine d b y th e standard s o f ordinar y decen t people . ^ ^

Th e elemen t o f 'obtaining ' an d th e resultin g requiremen t tha t th e relevan t deceptio n cause d o r le d t o th e obtainin g ha s bee n considere d abov e i n th e contex t o f sectio n 29 A o f th e Commonwealt h Crime s Act . Th e expressio n 'financia l advantage ' i s no t define d i n th e Victoria n Crime s Act , thoug h i t woul d plainl y includ e mone y o r a credi t t o a

ban k account .

Sectio n 32 3 o f th e Victoria n Crime s Ac t provide s tha t a perso n wh o aids , abets , counsel s o r procure s th e commissio n o f a n indictabl e offenc e ma y b e tried , indicte d o r presente d an d punishe d a s a principa l offender . Thi s sectio n operate s i n th e sam e wa y a s sectio n 5 o f th e Commonwealt h Crime s Ac t a s discusse d above , thoug h ther e i s n o provisio n fo r a perso n t o b e a n accessor y b y bein g 'knowingl y concerned' .

Sectio n 8 4 o f th e Victoria n Crime s Ac t provide s tha t wher e a bod y corporat e ha s committe d a n offenc e unde r section s 81 , 8 2 o r 83 , a 'director , manager , secretar y o r othe r simila r officer ' o f th e bod y corporat e wil l als o b e liabl e i f tha t perso n i s prove d t o hav e consente d o r connive d i n th e commissio n o f th e offenc e b y th e bod y corporate .

Sectio n 80 A o f th e Victoria n Crime s Ac t provide s fo r th e extr a territoria l operatio n o f a numbe r o f offenc e provisions , includin g sectio n 82 . I t provide s a s follows :

80 A (1 ) I f -

(a ) a perso n does , o r omit s t o do , a n ac t o r thin g referre d t o i n section s 81-8 7 (bot h inclusive ) outside , o r partl y outside , Victoria ; an d

(b ) ther e i s a rea l an d substantia l lin k withi n th e meanin g o f sub-sectio n (2 ) betwee n doing , o r omittin g t o do , th e ac t o r thin g an d Victori a —

thos e section s appl y t o th e ac t o r thin g o r th e omissio n a s i f i t ha d bee n done , o r omitte d t o b e done , wholl y withi n Victoria .

(2 ) Fo r th e purpose s o f sub-sectio n (1) , ther e i s a rea l an d substantia l lin k wit h Victori a —

(a ) i f a significan t par t o f th e conduc t relatin g to , o r constitutin g th e doin g o f th e ac t o r thing , o r th e omission , occurre d i n Victoria ; o r

(b ) wher e th e ac t o r thin g wa s done , o r th e omissio n occurred , wholl y outsid e Victoria , i f th e ac t o r thin g wa s done , o r omitte d t o b e done , wit h th e intentio n tha t substantia l harmfu l effect s aris e i n Victori a an d suc h effect s di d arise .

I n th e cas e o f AW B an d Rhin e Ruhr , th e relevan t questio n i s whethe r a significan t par t o f an y deceptio n practise d b y the m occurre d i n Victoria . T o answe r tha t question , i t

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woul d b e necessar y t o conside r eac h ac t tha t constitute d eac h allege d deceptio n an d the n conside r whethe r a significan t par t o f tha t conduc t occurre d i n Victoria . I n th e cas e o f a deceptio n arisin g fro m th e forwardin g o f a Notificatio n for m an d contractua l documentatio n t o DFA T (an d a s a resul t o f th e fac t tha t thos e document s omitte d t o infor m DFA T tha t ther e wer e collatera l arrangement s relatin g t o th e paymen t o f inlan d transportatio n an d after-sales-servic e fee s an d tha t thos e fee s ha d bee n incorporate d i n th e contrac t price) , i f thos e document s wer e forwarde d fro m AWB' s o r Rhin e Ruhr' s Victoria n offices , i t i s ope n t o conclud e tha t a significan t par t o f th e relevan t conduc t occurre d i n Victoria .

A significan t issu e likel y t o aris e i n relatio n t o an y allege d offenc e tha t contain s a s a n elemen t a deceptio n o r fals e pretenc e practise d o n th e Unite d Nation s i s tha t th e relevan t companie s di d no t communicat e directl y wit h th e Unite d Nations . Al l documentatio n an d othe r materia l communication s betwee n th e companie s an d th e Unite d Nation s occurre d throug h DFAT . A n offenc e involvin g a deceptio n o r fals e representatio n can , however , b e mad e ou t i n circumstance s wher e th e fals e representatio n o r deceptio n i s communicate d t o th e victi m throug h a n innocen t agent . I n White v Ridley^», Gibb s J said :

However , i t i s wel l settle d a t commo n la w tha t a perso n wh o commit s a crim e b y th e us e o f a n innocen t agen t i s himsel f liabl e a s a principa l offender . Tha t i s s o no t only wher e th e agen t lack s crimina l responsibility , as , fo r example , whe n h e i s insan e o r to o youn g t o kno w wha t h e i s doing , bu t als o wher e th e agent , althoug h o f soun d min d an d ful l understanding , i s ignoran t o f th e tru e fact s an d believe s tha t wha t h e i s doin g i s lawful . Thus , i f A send s ou t B wit h a forge d ban k not e fo r th e purpos e o f passin g it , an d B doe s so , bein g ignoran t tha t i t wa s forged , A i s guilt y o f utterin g an d publishin g th e not e a s true , sinc e 'wher e a n innocen t perso n i s employe d fo r a crimina l purpose , th e employe r mus t b e answerable' : R i ' Palmer and Hudson. I f A give s B fals e particular s t o ente r i n a register , an d B enter s the m i n th e belie f tha t the y ar e true , A i s guilt y o f makin g th e fals e entr y i n th e register : Reg v Butt.

A s discusse d i n Chapte r 36 , DFA T di d no t kno w tha t ther e wa s anythin g fals e o r misleadin g abou t th e documentatio n tha t i t forwarde d t o th e Unite d Nation s i n respec t o f AWB' s whea t contracts , o r tha t th e documentatio n ha d omitte d fro m i t materia l fact s relatin g t o th e arrangement s betwee n AW B an d th e Iraqis . Ther e i s

evidenc e tha t demonstrate s tha t relevan t officer s o f AW B kne w tha t DFA T sen t th e documentatio n t o th e Unite d Nation s fo r th e purpos e o f approva l b y th e Unite d Nations , tha t th e documentatio n mad e n o referenc e t o th e collatera l arrangement s betwee n AW B an d th e 1G B i n relatio n t o inlan d transportatio n fee s an d th e incorporatio n o f thes e fee s i n th e contrac t pric e an d tha t DFA T di d no t kno w abou t

thos e arrangements . Fo r al l intent s an d purpose s DFA T wa s a n innocen t agent .

Offence s involvin g briber y o r secre t commission s

Ther e ar e offenc e i n bot h th e Crimina l Cod e an d variou s th e Crime s Act s an d Code s o f variou s State s tha t involv e th e paymen t o f bribe s an d secre t commission s an d othe r corrup t practise s tha t ar e potentiall y applicable .

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Crimina l Code—briber y o f foreig n official s

Divisio n 7 0 o f th e Crimina l Cod e wa s inserte d int o th e Crimina l Cod e wit h operatio n fro m 1 7 Decembe r 1999''' ^ t o giv e domesti c effec t t o Australia' s ratificatio n o f th e Conventio n o n Combatin g Briber y o f Foreig n Publi c Official s i n Internationa l Busines s Transactions . Subsectio n 70.2(1 ) o f th e Crimina l Cod e provide s a s follows :

70. 2 (1 ) a perso n i s guilt y o f a n offenc e if :

(a ) tli e person :

(i ) provide s a benefi t t o anothe r person ; o r

(ii ) cause s a benefi t t o b e provide d t o anothe r person ; o r

(iii ) offer s t o provide , o r promise s t o provide , a benefi t t o anothe r person ; o r

(iv ) cause s a n offe r o f th e provisio n o f a benefit , o r a promis e o f th e provisio n o f a benefit , t o b e mad e t o anothe r person ; an d

(b ) th e benefi t i s no t legitimatel y du e t o th e othe r person ; an d

(c ) th e first-mentione d perso n doe s s o wit h th e intentio n o f influencin g a foreig n publi c officia l (wh o ma y b e th e othe r person ) i n th e exercis e o f th e official' s dutie s a s a foreig n publi c officia l i n orde r to :

(i ) obtai n o r retai n business ; o r

(ii ) obtai n o r retai n a busines s advantag e tha t i s no t legitimatel y du e t o th e recipient , o r intende d recipient , o f th e busines s advantag e (wh o ma y b e th e first-mentione d person )

Penalty : Imprisonmen t fo r 1 0 years .

Th e element s o f th e offenc e create d b y subsectio n 70.2(1) , relevan t t o th e matte r a t hand , ar e a s follows :

Th e defendant :

(1 ) promise s t o provid e a benefi t t o b e provide d t o anothe r perso n (A) ; an d

(2 ) th e benefi t i s no t legitimatel y du e t o A ;

(3 ) wit h th e intentio n o f influencin g a foreig n publi c officia l (wh o ma y b e th e sam e perso n a s A ) i n th e exercis e o f th e official' s dutie s a s a foreig n publi c official ;

(4 ) i n orde r t o obtai n o r retai n business .

Fo r th e purpos e o f considerin g th e potentia l availabilit y o f thi s offence , i t wil l b e assume d tha t th e defendan t i s AWB , th e othe r perso n (A ) i s a n Iraq i Ministr y o r

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Government entity (for example the Iraqi State Company for Water Transport) and the foreign public official is the Director General of the Iraqi Grains Board. In the absence of any contrary intention in the section, the person to whom the benefit is paid (A) can

be a body politic.i!"

In relation to element (1), 'benefit' is defined in section 70.1 as including any advantage and is not limited to property. Proof that AWB promised to pay money (indirectly via Alai) to the Iraqi State Company for Water Transport or any other Iraqi entity, in the form of inland transportation or after-sales-service fees, would satisfy element (1).

In relation to element (2), the Criminal Code does not define the circumstances in which a benefit is to be found to be not legitimately due. However, subsection 70.2(2) provides that in working out if a benefit is not legitimately due, the following matters

should be disregarded:

(a) the fact that the benefit may be customary, or perceived to be customary, in the situation

(b) the value of the benefit

(c) any official tolerance of the benefit.

There are difficulties in determining whether the benefits received, or to be received, by the Iraqi State Company for Water Transport in the circumstances of this matter were not legitimately due. The difficulties arise because, as discussed in Chapters 13 and 21 the inland transportation fees and after-sales-service fees were demanded of, or levied from, AWB as a result of directives or orders from Ministers or Ministries of the Iraqi Government. The fees were akin to a tariff imposed by the Iraqi government on all goods imported under the Oil-for-Food Programme. It is open to conclude from this that the payments were lawful, or at least not unlawful, as a matter of Iraqi law. The lawfulness of the impost, as a matter of Iraqi law, amounts to more than 'custom' or 'official tolerance,' these being matters that must be disregarded in working out whether a benefit was not legitimately due.

In these circumstances, the only way in which it could be asserted that the benefits were not legitimately due to the Iraqis was that they were contrary to United Nations sanctions. It is however, questionable whether payments that are not unlawful in a country as a matter of domestic law could be held to be 'not legitimately due' solely by reason of actions taken by the United Nations.

In the end it is not necessary to decide this question because, as will be seen, the fact that the payments were not unlawful in Iraq constitutes a defence to the offence in any event.

In relation to elements (3) and (4), 'foreign public official' is defined broadly in section 70.1 and includes an employee or official of a foreign government body. In the

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circumstance s o f thi s matter , elemen t (3 ) woul d b e mad e ou t i f th e availabl e evidenc e wa s sufficien t t o prov e tha t AWB' s intentio n i n promisin g t o pa y th e inlan d transpor t o r after-sales-servic e fee s wa s t o influenc e a n employe e o r officia l o f th e Iraq i Grain s Board , i n th e cours e o f tha t officer' s dut y a s suc h a n officer , t o accep t AWB' s tende i an d agre e t o purchas e it s wheat . Proo f tha t agreein g t o pa y th e fee s wa s a prerequisit e

f o th e Iraq i Grain s Boar d enterin g int o a contrac t an d tha t AW B kne w thi s woul d b e sufficien t proof .

Sectio n 70. 3 provide s a numbe r o f defence s t o th e offenc e create d b y subsectio r 70.2(1) . Th e genera l thrus t o f th e defence s create d i n subsectio n 70.3(1 ) i s tha t i t i s o defenc e i f th e defendant' s conduc t (relevantly , promisin g t o provid e th e paymen t t i th e foreig n publi c official ) occurre d i n th e countr y o r plac e wher e th e foreig n publi c officia l wa s located , th e defendan t woul d no t hav e bee n guilt y o f a n offenc e agains t la w i n plac e i n tha t plac e o r country . Subsectio n 70.2(1 ) contain s a numbe r o f item s tha t correspon d t o th e paragraph s o f th e definitio n o f foreig n publi c officia l i n sectio n 70.1 . I n th e circumstance s currentl y unde r consideration , th e foreig n publi c officia l

wa s a n employe e o r officia l o f a foreig n governmen t bod y a s provide d fo r i n paragrap h (a ) o f th e sectio n 70. 1 definition . Ite m 1 o f subsectio n 70.3(1 ) provide s tha i i f i t wer e assume d tha t th e person' s (th e defendant's ) conduc t ha d occurre d wholl y i n th e plac e wher e th e centra l administratio n o f th e bod y i s locate d (i n thi s cas t Baghdad) , th e defendan t i s no t guilt y o f a n offenc e i f th e defendan t woul d no t hav e bee n guil t o f a n offenc e i n tha t plac e (namel y Baghdad) .

B y reaso n o f section s 13.1,13. 2 an d 13. 3 o f th e Crimina l Code , a defendan t woul d bea r a n evidentia l burde n i n relatio n t o th e defenc e i n subsectio n 70.3(1 ) —tha t is , th e defendan t mus t adduc e o r poin t t o evidenc e tha t suggest s a reasonabl e possibilit y tha i th e matte r (i n thi s cas e th e lawfulnes s o f th e conduc t ha d i t occurre d i n Baghdad ) exists . Onc e tha t evidentia l burde n i s discharged , th e prosecutio n bear s th e lega l burde n o f disprovin g th e existenc e o f tha t matte r beyon d reasonabl e doubt .

Ther e i s evidenc e tha t point s t o th e likelihoo d tha t i f AWB' s conduc t i n promisin g t o mak e th e paymen t t o th e Iraqi s ha d occurre d i n Baghdad , AW B woul d no t hav e bee n guilt y o f a n offenc e agains t a la w i n forc e i n tha t place . Tha t i s becaus e th e

requiremen t t o pa y inlan d transpor t o r after-sales-servic e fee s t o Iraq i entitie s wa s th e resul t o f directive s o r order s b y Iraq i governmen t Minister s o r officials . Th e availabl e inferenc e is , therefore , tha t i t wa s no t unlawfu l i n Ira q t o mak e suc h payments . Th e fac t tha t th e paymen t ma y hav e bee n contrar y t o th e Unite d Nation s sanction s woul d no t hav e affecte d th e lawfulnes s o f th e payment s a s a matte r o f Iraq i law .

I t follow s that , a t leas t i n relatio n t o th e paymen t o f inlan d transpor t an d after-sales -servic e fees , ther e i s n o reasonabl e basi s fo r concludin g tha t a n offenc e ma y hav e bee n committe d agains t subsectio n 70.2(1 ) o f th e Crimina l Code .

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state provisions concerning secret commissions

A number of States prohibit the giving or offering of secret commissions to agents. Subsection 176(2) of the Crimes Act 1958 (Vic) provides, for example:

(2) Whosoever corruptly gives or offers to any agent any valuable consideration *

(a) as an inducement or reward for or otherwise on account of doing or forbearing to do or having done or forborne to do any act in relation to his principal's affairs or business;

or

(b) the receipt or any expectation of which would in any way tend to influence him to show or forbear to show favour or disfavour to any person in relation to his principal's affairs or business *

shall be guilty of an indictable offence , and shall *

be liable if a corporation to a level 5 fine and if any other person to level 5 imprisonment (10 years maximum) or a level 5 fine or both.

There is a similar provision in section 249B(2) of the Crimes Act 1900 (NSW).

It is unnecessary to give any detailed consideration to these provisions because they are unlikely to have any relevant application to the matter at hand. The general thrust of the offence is to criminalise the giving of money (or other valuable consideration) by a defendant to an agent as a reward for the agent granting, or causing to be granted, business from the agent's principal. A simple example of the type of conduct that would constitute an offence under this provision (and others like it) is the case where a defendant pays money to an agent, generally without the knowledge of the agent's principal, as a reward for the agent causing or procuring the principal to select the defendant as, for example, a preferred supplier of goods or services to the principal. In the present case, whilst on one view Alia was acting as an agent of the IGB when it received into its bank account payments representing inland transportation or after-sales-service fees, it received these funds pursuant to an arrangement with its principal (the IGB) whereby Alia was remunerated by the IGB (by being permitted to retain a percentage of the payment as commission) for its services as a conduit for the payments. It did not receive the funds from AWB as a reward for caused the IGB to award a contract or contracts for the supply of wheat to the IGB. The decision to award the contract to the AWB was made by the IGB well prior to the payment of the fees by AWB.

Offences involving money laundering

Offences involving the possession, concealment or disposal of the proceeds of crime may have some potential relevance if it is found that AWB committed offences arising

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f r o m th e r e c o u p m e n t o f th e Tigri s d e b t vi a th e inflatio n o f t h e pric e i n contract s 167 0 a n d 1680 . Th e m o n e y o b t a i n e d a n d deal t w i t h b y A W B i n thes e c i r c u m s t a n c e s coul d b e r e g a r d e d t o b e th e p r o c e e d s o f crime . Th e m o s t likel y s u b s t a n t i v e offenc e relatin g t o th e Tigri s d e b t i s sectio n 8 2 o f th e Victoria n C r i m e s Ac t (considere d above) .

Accordingly , th e Victoria n m o n e y l a u n d e r i n g p r o v i s i o n s ar e m o s t likel y th e r e l e v a n t provisions .

I n Victoria , i t i s a n offenc e t o dea l w i t h p r o p e r t y tha t i s th e p r o c e e d s o f c r i m e o r i s

s u s p e c t e d o f bein g th e p r o c e e d s o f crime . I n t h e p e r i o d 1 Jul y 199 8 t o 1 J a n u a r y 2004 , th e r e l e v a n t offenc e p r o v i s i o n s w e r e section s 12 2 a n d 12 3 o f th e Confiscatio n Ac t 199 7 (Vic) . Sectio n 12 2 o f th e Confiscatio n Ac t p r o v i d e d a s follows :

122 . Mone y launderin g

(1 ) A perso n wh o engage s i n mone y launderin g i s guilt y o f a n indictabl e offenc e an d liabl e t o leve l 3 imprisonmen t (2 0 year s maximum ) o r a leve l 3 fin e (240 0 penalt y unit s maximum ) o r t o both .

(2 ) A perso n engage s i n mone y launderin g if , an d onl y if —

(a ) th e perso n engages , directl y o r indirectly , i n a transactio n tha t involve s money , o r othe r property , tha t i s proceed s o f crime ; o r

(b ) th e perso n receives , possesses , conceals , dispose s o f o r bring s int o Victori a an y money , o r othe r property , tha t i s proceed s o f crim e —

an d th e perso n knows , o r ough t reasonabl y t o know , tha t th e mone y o r othe r propert y i s derive d o r realised , directl y o r indirectly , fro m som e for m o f unlawfu l activity .

(3 ) I t i s a defenc e t o a prosecutio n fo r a n offenc e unde r thi s sectio n i f th e defendan t satisfie s th e cour t tha t th e defendan t engage d i n mone y launderin g t o assis t th e enforcemen t o f a la w o f th e Commonwealth , a Stat e o r a Territory .

' P r o c e e d s o f crime ' w a s d e f i n e d i n sectio n 12 1 o f th e Confiscatio n Ac t i n th e f o l l o w i n g t e r m s

121 . Definition s

I n thi s Par t —

'proceed s o f crime ' mean s —

(a ) proceed s o f a forfeitur e offenc e o r a n offenc e agains t a la w o f th e Commonwealt h tha t ma y b e deal t wit h a s a n indictabl e offenc e (eve n i f i t may , i n som e circumstances , b e deal t wit h a s a summar y offence ) committe d i n Victoria ; o r

(b ) an y propert y tha t i s derive d o r realised , directl y o r indirectly , b y an y perso n fro m act s o r omission s tha t —

(i ) occurre d outsid e Victoria ; an d

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(ii ) would , i f the y ha d occurre d i n Victoria, hav e constitute d a n offenc e referre d t o i n paragrap h (a) ;

'Forfeitur e offence ' wa s ciefine d i n sectio n 3(1 ) a s including , amongs t othe r things , a n offenc e referre d t o i n Schedul e 1 . A n offenc e referre d t o i n schedul e 1 wa s 'a n indictabl e offenc e agains t th e la w o f Victoria. ' 'Unlawfu l activity ' wa s define d i n sectio n 3(1 ) a s meanin g a n ac t o r omissio n tha t constitute s a n offenc e agains t a la w i n forc e i n th e Commonwealth , Victori a o r anothe r State , a Territor y o r a foreig n countr y punishabl e b y imprisonment .

'Proceeds ' wa s define d i n sectio n 3(1 ) i n th e followin g terms ;

'proceeds' , i n relatio n t o a n offence , mean s an y propert y tha t i s derive d o r realised , directl y o r indirectly , b y an y perso n fro m th e commissio n o f th e o f f e n c e ; i o i

Thus , th e element s o f th e offenc e agains t s 122(2)(b ) o f th e Confiscatio n Ac t were :

(1 ) th e defendant ,

(2 ) received , possessed , concealed , dispose d o f o r brough t int o Victoria ,

(3 ) money , o r othe r property , tha t wa s proceed s o f crim e (tha t is , relevantly , propert y tha t wa s derive d o r realised , directl y o r indirectly , b y an y perso n fro m th e commissio n o f a n indictabl e offenc e agains t th e la w o f Victoria) , an d

(4 ) th e defendant :

(a ) knew , o r

(b ) ough t reasonabl y t o hav e known ,

tha t th e mone y o r othe r propert y i s derive d o r realised , directl y o r indirectly , fro m som e for m o f unlawfu l activit y (tha t is , th e activit y wa s a n ac t o r omissio n tha t constitute s a n offenc e agains t a la w i n forc e i n th e

Commonwealth , Victori a o r anothe r State , a Territor y o r a foreig n countr y pubhshabl e b y imprisonment) , an d

(5 ) th e defendan t di d no t engag e i n mone y launderin g t o assis t th e enforcemen t o f a la w o f th e Commonwealth , a Stat e o r a Territory .

Anothe r potenhall y relevan t offenc e provisio n i s sectio n 12 3 o f th e Confiscation Act . Betwee n 1 Jul y 199 8 an d 1 Januar y 2004 , sectio n 12 3 provide d a s follows :

(1 ) A perso n mus t no t receive , possess , conceal , dispos e o f o r brin g int o Victori a an y money , o r othe r propert y tha t ma y reasonabl y b e suspecte d o f bein g proceed s o f crime .

Penalty : Leve l 7 imprisonmen t ( 2 year s maximum ) o r a leve l 7 fin e (24 0 penalt y unit s maximum ) o r both .

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(2 ) I t i s a defenc e t o a charg e fo r a n offenc e agains t sub-sectio n (1 ) i f th e defendan t satisfie s th e cour t tha t th e defendan t ha d reasonabl e ground s fo r no t suspectin g tha t th e propert y referre d t o i n th e charg e wa s proceed s o f crime .

H a v i n g regar d t o th e definition s previousl y considered , th e element s o f thi s offenc e uncie r sectio n 12 3 w e r e a s follows :

(1 ) th e d e f e n d a n t ,

(2 ) received , possessed , concealed , dispose d o f o r b r o u g h t int o Victoria ,

(3 ) money , o r othe r p r o p e r t y ,

(4 ) tha t m a y reasonabl y h a v e bee n suspecte d o f b e i n g p r o c e e d s o f crim e (tha t is , propert y tha t w a s d e r i v e d o r realised , directl y o r indirectly , b y an y perso n f r o m th e commissio n o f a n indictabl e offenc e agains t th e la w o f Victoria) .

Wit h effec t f r o m 1 J a n u a r y 2004 , section s 19 4 a n d 19 5 o f th e Crime s Ac t 195 8 (Vic ) replace d thes e section s o f th e Confiscatio n Act . Sectio n 19 4 o f th e Crimes Act p r o v i d e s a s follows :

(1 ) A perso n mus t no t dea l wit h proceed s o f crim e —

(a ) knowin g tha t i t i s proceed s o f crime ; an d

(b ) intendin g t o concea l tha t i t i s proceed s o f crime .

Penalty : Leve l 3 imprisonmen t (2 0 year s maximum) .

(2 ) A perso n mus t no t dea l wit h proceed s o f crim e knowin g tha t i t i s proceed s o f crime .

Penalty : Leve l 4 imprisonmen t (1 5 year s maximum) .

(3 ) A perso n mus t no t dea l wit h proceed s o f crim e bein g reckles s a s t o whethe r o r no t i t i s proceed s o f crime .

Penalty : Leve l 5 imprisonmen t (1 0 year s maximum) .

(4 ) A perso n mus t no t dea l wit h proceed s o f crim e bein g negligen t a s t o whethe r o r no t i t i s proceed s o f crime .

Penalty : Leve l 6 imprisoninen t ( 5 year s maximum) .

(5 ) I t i s a defenc e t o a prosecutio n fo r a n offenc e unde r thi s sectio n i f th e accuse d satisfie s th e cour t tha t th e accuse d deal t wit h th e propert y i n orde r t o assis t th e enforcemen t o f a la w o f th e Commonwealth , a Stat e o r a Territory .

Th e element s o f th e v a r i o u s offence s create d b y sectio n 19 4 o f th e Victoria n Crime s Ac t are , relevantly :

(1 ) th e d e f e n d a n t .

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(2 ) deal t wit h (tha t is , received , possessed , conceale d o r dispose d of)i® ,

(3 ) proceed s o f crim e (tha t is , propert y tha t wa s derive d o r realised , directl y o r indirectly , b y an y perso n fro m th e commissio n o f a n mdictabl e offenc e agains t th e la w o f Victoria ) an d

(4 ) th e defendant :

(a ) kne w tha t th e propert y wa s th e proceed s o f crime ;

an d

(b ) intende d t o concea l tha t i t wa s th e proceed s o f crime ;

o r

(b ) kne w tha t th e propert y wa s th e proceed s o f crime ;

o r

(c ) wa s reckles s a s t o whethe r th e propert y wa s th e proceed s o f crime ;

o r

(d ) wa s negligen t a s t o whethe r th e propert y wa s th e proceed s o f crime ,

an d

(5 ) th e defendan t di d no t dea l wit h th e propert y i n orde r t o assis t th e

enforcemen t o f a la w o f th e Commonwealth , a Stat e o r a Territory .

Th e othe r potentiall y relevan t offenc e i s create d b y Sectio n 195 , whic h provide s a s follows :

A perso n wh o deal s wit h propert y i f ther e ar e reasonabl e ground s t o suspec t tha t th e propert y i s proceed s o f crim e i s guilt y o f a summar y offenc e an d liabl e t o leve l 7 imprisonmen t ( 2 year s maximum) .

Th e element s o f th e offenc e create d b y sectio n 19 5 are :

(1 ) th e defendan t

(2 ) deal t wit h (tha t is , received , possessed , conceale d o r dispose d

(3 ) property ,

(4 ) i n circumstance s wher e ther e wer e reasonabl e ground s t o suspec t tha t th e propert y wa s th e proceed s o f crim e (tha t is , propert y tha t wa s derive d o r

Report of the Oil-for-Food Incjuiry 3 5 3

realised , directl y o r indirectly , b y an y perso n fro m th e commissio n o f a n indictabl e offenc e agains t th e la w o f Victoria) .

Th e potentia l significanc e o f thes e mone y launderin g offence s i s tha t officer s o f AW B wh o wer e no t knowingl y involve d i n th e conduc t tha t recoupe d th e Tigri s deb t (th e inflatio n o f th e contrac t pric e i n contract s 167 0 an d 168 0 an d th e concealmen t o f thi s fac t fro m DFA T an d th e Unite d Nations ) ma y nonetheles s b e culpabl e i f the y cam e t o late r lear n o f thi s unlawfu l activit y an d wer e the n involve d i n som e wa y i n dealin g wit h th e proceeds . O f importanc e als o i s tha t th e offence s create d b y subsection s 194(3 ) an d (4 ) requir e onl y proo f o f recklessnes s o r neghgenc e i n relatio n t o whethe r th e mone y wa s th e proceed s o f crime .

Offence s relatin g t o Terroris m

Par t 5. 3 o f th e Crimina l Cod e contain s a numbe r o f offence s relatin g t o terrorism . Som e o f thes e offence s hav e potentia l applicatio n insofa r a s the y relat e t o th e provisio n o f fund s t o a terroris t organisation , o r t o th e reckles s provisio n o f fund s tha t ma y b e use d t o facilitat e o f engag e i n terroris t acts . Th e provision s wit h potentia l applicatio n — i n particula r section s 102.6 , 102. 7 an d 103. 1 o f th e Crimina l Cod e — relevantl y commence d operatio n o n 6 Jul y 2002. lo ^ Section s 102. 6 an d 102. 7 wer e repeale d an d replace d wit h substitute d provision s o n 2 9 iVla y 2003.^0 ® Th e followin g analysi s accordingl y deal s wit h th e provision s a s the y stoo d betwee n 6 Jul y 200 2 an d 2 9 Ma y 2003 .

Financin g terrorism—sectio n 103. 1 o f th e Crimina l Cod e

Durin g th e relevan t period , sectio n 103. 1 provide d a s follows :

(1 ) A perso n commit s a n offenc e if :

(a ) tfi e perso n provide s o r collect s funds ;

(b ) th e perso n i s reckles s a s t o whethe r th e fund s wil l b e use d t o facilitat e o r engag e i n a terroris t ac t

Penalty : Imprisonmen t fo r life .

(2 ) A perso n commit s a n offenc e unde r subsectio n (1 ) eve n i f th e terroris t ac t doe s no t occur .

(3 ) Sectio n 15. 4 (extende d geographica l jurisdiction—categor y D ) applie s t o a n offenc e agains t subsectio n (1) .

Th e element s o f th e offenc e create d b y sectio n 103. 1 tha t ar e potentiall y relevan t t o th e matte r a t han d are :

(1 ) th e defendan t intentionall y provide d funds ;

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(2) the defendant was reckless as to whether the funds would be used to facilitate or engage in a terrorist act.

The first element of this offence is extremely broad. The words 'funds' and 'provides' are not defined in the Criminal Code and accordingly bear their ordinary meanings. The word 'funds' is relevantly defined in the Macquarie Dictionary as meaning 'money in hand, pecuniary resources.' The word 'provides' is relevantly defined as meaning 'furnish.' It is unnecessary to prove that the funds were provided in any particular form, or in any particular way, or to any particular person or body, or type of person or body. The element would be satisfied upon proof that funds were provided indirectly (via Alia or otherwise) to Iraq, or an Iraqi Ministry or government entity.

Because the physical element of providing funds consists of conduct, the corresponding fault (or mental) element is intention, lo^ This requires proof that the defendant meant to engage in that conduct."" It is thus necessary to prove only that

the defendant intended to provide funds to someone. In the present case, it would be sufficient to prove that the defendant intended to provide funds (directly or indirectly) to Iraq, or to an Iraqi Ministry or government entity. It is not necessary to

prove that the defendant intended to provide the funds to Iraq for any particular purpose or reason.

Element (2) requires proof that the defendant was reckless as to a result; that is, whether the funds would be used to facilitate or engage in a terrorist act. Section 5.4(2) of the Criminal Code provides as follows:

(2) A person is reckless with respect to a result if:

(a) he or she is aware of a substantial risk that the result will occur: and

(b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk.

At the relevant time, section 101.1 defined 'terrorist act' in the following broad terms:

terrorist act means an action or threat of action where:

(a) the actions falls within subsection (2) and does not fall within subsection (2A); and

(b) the action is done or the threat is made with the intention of advancing a political, religious or ideological cause; and

(c) the action is done or the threat is made with the intention of:

(i) coercing, or influencing by intimidation, the government of the Commonwealth or a State, Territory or foreign country, or part of a State, Territory, or foreign country; or

(ii) intimidating the public or a section of the public.

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(2 ) Actio n fall s withi n thi s subsectio n i f it ;

(a ) cause s seriou s har m tha t i s physica l har m t o th e person ; o r

(b ) cause s seriou s damag e t o property ; o r

(ba ) cause s a person' s death ; o r

(c ) endanger s a person' s life , othe r tha n th e lif e o f th e perso n takin g th e action ; o r

(d ) create s a seriou s ris k t o th e healt h o r safet y o f th e publi c o r a sectio n o f th e public ; o r

(e ) seriousl y interfere s with , seriousl y disrupts , o r destroys , a n electroni c system , including , bu t no t limite d to :

(i ) a n informatio n system ;

(ii ) a telecommunication s system ; o r

(iii ) a financia l system ; o r

(iv ) a syste m use d fo r th e deliver y o f essentia l governmen t services ; o r

(v ) a syste m use d for , o r by , a n essentia l publi c utility ; o r

(vi ) a syste m use d for , o r by , a transpor t system .

(2A ) Actio n fall s withi n thi s subsectio n i f it :

(a ) i s advocacy , protest , dissen t o r industria l action ; an d

(b ) i s no t intended :

(i ) t o caus e seriou s har m tha t i s physica l har m t o a person ; o r

(ii ) t o caus e a person' s death ;

(iii ) t o endange r th e lif e o f a person , othe r tha n th e perso n takin g th e action ; o r

(iv ) t o creat e a seriou s ris k t o th e healt h o r safet y o f th e publi c o r a sectio n o f th e public .

(3 ) I n thi s Division :

(a ) a referenc e t o an y perso n o r propert y i s a referenc e t o an y perso n o r propert y whereve r situated , withi n o r outsid e Australia ; an d

(b ) a referenc e t o th e publi c include s a referenc e t o th e publi c o f a countr y othe r tha n Australia .

Th e secon d elemen t o f th e offenc e unde r sectio n 103. 1 wil l b e mad e ou t i f i t ca n b e prove d tha t th e defendan t kne w tha t ther e wa s a substantia l ris k tha t th e fund s bein g

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provided by it would be used for any of the actions, or threats of action, listed in the definition of 'terrorist act' (that do not fall within subsection 101.1(2A)) and that having regard to the circumstances known to the defendant it was unjustifiable to take the risk and go ahead and provide the funds.

Whether a defendant knew that there was such a substantial risk is ultimately a question of fact for the tribunal of fact. It would, however, be open to the prosecution to prove, by inference, that the defendant knew or must have known that the person or body to whom it was providing funds had in the past committed terrorist acts as defined and had not disavowed further terrorist acts or had threatened future acts. This, in turn, would provide the basis for an inference that the defendant therefore knew, or must have known, that there was a risk that it would carry out such actions with any funds provicied to it in the future. Relevantly, in the case of the provision of

funds to Iraq, the element could possibly be made out if it could be proved that such was the public notoriety of Saddam Hussein's regime and the violent acts perpetrated by it, or threatened to be perpetrated by it, against sections of the Iraqi public that it could be inferred that the defendant must have known that there was at least a risk

that any funds provided to the regime would be used to perpetrate similar acts in the future.

Funding terrorist organisations *section 102.6 of the Criminal Code

Subsections 102.6(1) and (2) of the Criminal Code are similar to section 103.1, though instead of being directed to the provision of funds for a terrorist act, they are directed to the funding of a terrorist organisation. At the relevant time subsections 102.6(1) and (2) were in the following terms:

(1) A person commits an offence if:

(a) the person intentionally receives funds from, or makes funds available to, an organisation (whether directly or indirectly); and

(b) the organisation is a terrorist organisation;

(c) the person knows the organisation is a terrorist organisation.

(2) A person commits an offence if:

(a) the person intentionally receives funds from, or makes funds available to, an organisation (whether directly or indirectly); and

(b) the organisation is a terrorist organisation;

(c) the person is reckless as to whether the organisation is a terrorist organisation.

The only difference between the two subsections is the fault element in paragraph (c) * knowledge in the case of subsection (1) and recklessness in the case of subsection (2). The elements of the offences are, relevantly, as follows:

Report of the Oil-for-Food Incjuiry 357

(1 ) th e perso n intentionall y make s fund s availabl e t o a n organisation ;

(2 ) th e organisatio n i s a terroris t organisation ;

(3 ) Either :

(a ) th e perso n know s th e organisatio n i s a terroris t organisatio n [in th e cas e o f s 102.6(1)] ; o r

(b ) th e perso n i s reckles s a s t o whethe r th e organisatio n i s a terroris t organisatio n [i n th e cas e o f s 102.6(2)] .

Th e firs t elemen t i s no t dissimila r t o th e firs t elemen t o f th e offenc e create d b y sectio n 103.1 . Th e onl y differenc e o f significanc e i s tha t th e fund s mus t b e mad e availabl e t o a n organisation . 'Organisatio n i s define d i n sectio n 101. 1 i n th e followin g terms :

'organisatio n mean s a bod y corporat e o r a n unincorporate d body , whethe r o r no t th e body :

(a ) i s base d outsid e Australia ;

(b ) consist s o f person s wh o ar e no t Australia n citizens ; o r

(c ) i s par t o f a large r organisation .

I t i s doubtfu l tha t th e makin g o f fund s availabl e t o th e Iraq i Governmen t woul d satisf y thi s elemen t becaus e i t i s a bod y politi c rathe r tha n a bod y corporat e o r unincorporate d bod y an d therefor e no t withi n th e statutor y definitio n o f a n organisation . A Departmen t o r Ministr y o f th e Iraq i Governmen t woul d als o no t fal l withi n th e definitio n o f 'organisation ' fo r th e sam e reason . However , a bod y corporat e o r unincorporate d bod y tha t i s owne d b y o r controlle d b y th e Iraq i Government—fo r exampl e th e Iraq i Stat e Compan y fo r Wate r Transpor t —may , dependin g o n ho w i t wa s constituted , fal l withi n th e definitio n o f a n organisation .

Th e critica l elemen t i n bot h th e subsectio n 102.6(1 ) an d (2 ) offence s i s th e secon d elemen t tha t require s proo f tha t th e organisatio n t o whic h th e fund s wer e mad e availabl e wa s a terroris t organisation . A t th e relevan t tim e 'terroris t organisation ' wa s define d i n sectio n 102. 1 i n th e followin g terms :

'terroris t organisation ' means :

(a ) a n organisatio n tha t i s directl y o r indirectl y engage d in , o r preparing , planning , assistin g i n o r fosterin g th e doin g o f a terroris t ac t (whethe r o r no t th e terroris t ac t occurs) ; o r

(b ) a n organisatio n tha t i s specifie d b y th e regulation s fo r th e purpose s o f thi s paragrap h (se e subsection s (3) , (4) , (5 ) an d (6)) .

N o relevan t Iraq i bod y corporat e o r unincorporate d bod y was , durin g th e relevan t period , specifie d i n th e Crimina l Cod e Regulation s a s bein g a terroris t organisation.^^ ^

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To make out this element, therefore, it would be necessary to prove that the body to which the defendant made funds available was at the time directly or indirectly engaged in, or preparing, planning in or fostering the doing of a terrorist act. The definition of 'terrorist act' in sechon 101.1 has been addressed above.

If the relevant organisation to which funds were made available was a body corporate or unincorporated body owned or controlled by the Iraqi Government *such as the Iraqi State Company for Water Transport *it would be necessary to prove that that body itself was directly or indirectly engaged in, or preparing, planning or fostering the doing of a terrorist act. It would not be sufficient to prove that the State Company merely passed the funds onto the Iraqi Government or some other body that may have engaged in terrorist acts, unless the act of passing the funds on to another body could of itself amount to indirectly engaging in or fostering a terrorist act. There are likely to be significant, if not insurmountable, difficulties in proving this in the present case.

The third element of the offence is the fault element. In the case of the subsection (1) offence, the fault element is knowledge that the organisation to which the money was made available was a terrorist organisation. This requires proof that the defendant was aware that this circumstance existed, or that it would exist in the ordinary course of e v e n t s . if the organisation to which the funds were made available was the Iraqi State Company for Water Transport, it would be necessary to prove that the defendant was aware that that organisation (as opposed to the Iraqi Government generally) was a terrorist organisation as defined.

In the case of the subsection (2) offence, the fault element is recklessness as to that circumstance. As considered above, that requires proof that the defendant was aware of a substantial risk that the organisation (relevantly the Iraq: State Company for Water Transport) was a terrorist organisation, and proof that having regard to the circumstances known to the defendant it was unjustifiable to take the risk and make the finance available to that organisation. Similar difficulties to those discussed above in relation to the subsection (1) offence are likely to be encountered in relation to this element.

Providing support to a terrorist organisation *s 102.7 of the Criminal Code

The elements of the offences created by subsections 102.7(1) and (2) of the Criminal Code are relevantly identical to the offences created by subsections 102.6(1) and (2) save that the first element of each of the offences is that the defendant intentionally provided support or resources to an organisation that would help the organisation engage in an activity described in paragraph (a) of the definition of terrorist organisation (as opposed to making funds available to the organisation, which is the first element in the subsection 102.6(1) and (2) offences). This element, at least in the circumstances of this case, is likely to be more difficult to prove than the first element in the subsection 102.6(1) and (2) offences.

Report of the OU-for-Food Inquir Ì! 359

Th e difficuhie s i n provin g th e secon d an d thir d element s (proo f tha t th e organisatio n wa s a terroris t organisatio n an d proo f tha t th e defendan t eithe r kne w o r wa s reckles s abou t thi s circumstance ) ar e addresse d abov e i n th e contex t o f sectio n 102.6 .

Offence s unde r th e Bankin g ( Foreig n Exchange ) Regulation s

an d th e Custom s Ac t

Th e Securit y Counci l Resolution s restrictin g dealing s wit h Ira q wer e implemente d domesticall y b y variou s direction s o r exemption s issue d b y th e Reserv e Ban k pursuan t t o th e Bankin g (Foreig n Exchange ) Regulation s an d b y certai n amendment s to , relevantly , th e Custom s (Prohibite d Exports ) Regulations . A numbe r o f offence s unde r th e Bankin g (Foreig n Exchange ) Regulation s an d th e Custom s Ac t hav e potentia l application .

Bankin g (Foreig n Exchange ) Regulations—regulation s 5 an d 4 2

Th e Bankin g (Foreig n Exchange ) Regulation s a t variou s relevan t time s impose d restriction s on , amongs t othe r things , transfer s o f Australia n currenc y an d foreig n currenc y transaction s tha t relate d t o payment s t o Iraq , it s agencie s o r nationals . A s discusse d i n Chapter s 1 8 an d 26 , AW B pai d inlan d transportatio n fee s an d after-sales -

servic e fee s i n U S dollars , Deutschmar k an d euro.i' ^ j o thi s end , AW B engage d i n foreig n currenc y transaction s i n relatio n t o it s paymen t o f inlan d transportatio n fees . Ther e wer e n o relevan t payment s o r transaction s i n Australia n currency . I t follow s tha t thos e provision s o f th e Bankin g (Foreig n Exchange ) Regulation s tha t relat e t o

foreig n currenc y transaction s hav e potentia l applicatio n t o AWB .

Th e relevan t regulation s hav e alread y bee n identifie d i n Chapte r 2 , a s hav e th e term s i n whic h thos e regulation s a p p e a r . '

AW B pai d inlan d transportatio n fee s i n respec t o f it s contract s wit h 1G B fro m Novembe r 199 9 unti l Marc h 2003 . Withi n tha t perio d ther e wa s a chang e i n th e term s o f th e Bankin g (Foreig n Exchange ) Regulations , i n particula r r . 5 , a s describe d i n Chapte r 2 . Thi s occurre d i n Marc h 2002 . Accordingly , fo r th e purpose s o f determinin g whethe r AW B migh t hav e contravene d an y o f thes e regulations , i t i s necessar y t o conside r bot h th e positio n prio r t o 1 0 Marc h 200 2 an d th e positio n afte r tha t date .

Prior to 7 7 March 2002

A t al l relevan t time s prio r t o 1 0 Marc h 2002 , regulatio n 5 o f th e Bankin g (Foreig n Exchange ) Regulation s relevantl y provide d a s follows :

(1 ) Subjec t t o sub-regulatio n (3) , excep t wit h th e authorit y o f th e Bank :

(a ) a perso n shal l not , eithe r o n hi s ow n behal f o r o n behal f o f anothe r person , buy , borrow , sell , len d o r exchang e i n Australia , o r otherwis e dea l i n Australi a with , foreig n currency ; an d

3 6 0 Report of the Oil-for-Food liiquir} /

(b ) a resident , o r a perso n actin g o n behal f o f a resident , shal l no t buy , borrow , sell , len d o r exchang e outsid e Australia , o r otherwis e dea l outsid e Australi a with , foreig n currency .

(2 ) Subjec t t o sub-regulatio n (3) , excep t wit h th e authorit y o f th e Bank , a perso n shal l no t b e a part y t o a transactio n tha t ha s th e effec t o f o r involve s a purchase , borrowing , sale , loa n o r exchang e of , o r tha t otherwis e relate s to , foreig n currency , bein g a transactio n tha t take s plac e i n whol e o r i n par t i n Australi a o r t o whic h a residen t i s a party .

(3 ) Th e Ban k ma y authoriz e a n agen t o f th e Bank -

(a ) t o ente r int o an y transactio n prohibite d b y sub-regulatio n (1 ) o f thi s regulation , o r int o an y transactio n include d i n a clas s o f suc h transaction s an d i t shal l b e lawfu l fo r th e transactio n t o b e entere d int o accordingly ; an d

(b ) t o b e a part y t o an y transactio n prohibite d b y sub-regulatio n (2 ) o f thi s regulation , o r t o an y transactio n include d i n a clas s o f suc h transactions , an d i t shal l b e lawfu l fo r th e agen t o f th e Ban k t o b e a part y t o th e transactio n accordingly .

Purdiase and sale of foreign currency during tins period I n Jun e 1984 , th e Reserv e Ban k o f Australi a g r a n t e d a n u m b e r o f authoritie s i n relatio n t o e n g a g i n g i n foreig n currenc y transaction s fo r th e p u r p o s e s o f r . 5 . Th e t e r m s o f thes e authorities , w h i c h ar e identifie d i n C h a p t e r 2 , w e r e a m e n d e d i n lat e 198 4 a n d agai n i n 1990 .

I n Jun e 1990 , th e Reserv e Ban k p u r s u a n t t o r . 3 9 o f th e Bankin g (Foreig n Exchange ) Regulation s r e v o k e d th e genera l authorit y g r a n t e d i n 198 4 a n d p u r s u a n t t o r . 38 A grante d i n it s stea d a genera l authorit y t o p e r s o n s i n Australi a t o bu y a n d sel l foreig n currenc y t h r o u g h a n authorise d deale r a n d t o resident s o f Australi a t o b u y a n d sel l

foreig n currenc y outsid e A u s t r a l i a . x h e term s o f tha t authorit y ar e se t ou t i n

C h a p t e r 2 .

O n 9 A u g u s t 19901" ^ an d 5 Apri l 1991 , th e Reserv e Ban k varie d thi s genera l a u t h o r i t y i n relatio n t o transaction s concernin g Iraq . Th e 5 Apri l 199 1 variatio n w a s relevantl y i n th e followin g terms :

Reserv e Ban k o f Australi a pursuan t t o Regulatio n 3 9 o f th e Bankin g (Foreig n Exchange ) Regulation s hereb y varie s th e genera l authorit y t o person s an d resident s o f Australi a date d 2 9 Jun e 199 0 s o tha t th e genera l authorit y doe s no t authorise :

1 . person s i n Australi a t o bu y foreig n currenc y froi n o r sel l foreig n currenc y t o a n authorise d deale r i n Australia ; o r

2 . resident s o f Australi a t o bu y o r sel l foreig n currenc y outsid e Australi a

wher e th e buyin g o r sellin g o f foreig n currenc y relate s t o transaction s i n property , securitie s o r fund s i n Australi a belongin g eithe r directl y o r indirectl y to , o r othe r payment s to , th e Governmen t o f Iraq , it s agencie s o r it s nationals .

Report of the Oil-for-Food Incjuiry 3 6 1

Al l suc h transactio n ar e prohibite d withou t th e specifi c approva l o f th e Reserv e Ban k o f Australia. .

Th e effec t o f th e 5 Apri l 199 1 variatio n t o th e genera l authorit y grante d b y th e Reserv e Ban k wa s tha t th e purchas e o r sal e o f foreig n currenc y throug h a n authorise d deale r i n Australi a o r b y a n Australia n residen t oversea s relatin g t o payment s t o th e

Governmen t o f Iraq , it s agencie s o r it s national s wa s n o longe r authorise d b y th e Ban k fo r th e purpose s o f r . 5(1 ) an d a s suc h woul d amoun t t o a contraventio n o f tha t regulation .

Regulatio n 4 2 o f th e Bankin g (Foreig n Exchange ) Regulation s provide s that :

A perso n shal l no t contraven e o r attemp t t o contravene , o r fai l t o compl y with , an y o f th e provision s o f thes e regulations .

Th e combine d operatio n o f r . 5 an d r . 4 2 an d th e variatio n o f 5 Apri l 199 1 t o th e Reserv e Bank' s genera l authorit y o f Jul y 199 0 relevantl y create d tw o offence s dependin g o n whethe r th e transactio n i n questio n occurre d i n Australi a o r outsid e

Australia .

I n th e cas e o f transaction s occurrin g i n Australia , th e element s o f th e offenc e are :

(1 ) th e defendan t (eithe r o n hi s ow n behal f o r o n behal f o f anothe r person ) bough t o r sol d foreig n currenc y i n Australia ;

(2 ) withou t th e authorit y o f th e Reserv e Bank , relevantl y because :

(a ) th e purchas e o r sal e o f foreig n currenc y relate d t o payment s t o th e Governmen t o f Iraq , it s agencie s o r it s national s an d thereb y fel l outsid e th e genera l authorit y o f th e Reserv e Ban k grante d i n Jul y 1990 ; an d

(b ) th e defendan t di d no t hav e th e specifi c approva l o f th e Reserv e Bank .

I n th e cas e o f transaction s occurrin g outsid e Australia , th e element s o f th e offenc e are :

(1 ) th e defendan t wa s a residen t (o r wa s actin g o n behal f o f a resident ) o f Australia ;

(2 ) wh o bough t o r sol d foreig n currenc y outsid e Australia ;

(3 ) withou t th e authorit y o f th e Reserv e Bank , relevantl y because :

(a ) th e purchas e o f sal e o f foreig n currenc y relate d t o payment s t o th e Governmen t o f Iraq , it s agencie s o r it s national s an d thereb y fel l outsid e th e genera l authorit y o f th e Reserv e Ban k grante d i n Jul y 199 0 an d

3 6 2 Report of the Oil-for-Food liiquir} /

(b ) th e defendan t di d no t hav e th e specifi c approva l o f th e Reserv e Bank .

I n th e cas e o f bot h o f thes e offences , i t i s necessar y als o t o conside r th e menta l o r faul t elemen t o f th e offences . I n th e cas e o f Commonwealt h offences , thi s wil l depen d o n whethe r th e relevan t ac t o r physica l elemen t o f th e offenc e occurre d befor e o r afte r 1 4

Decembe r 200 1 w h e n Chapte r 2 o f th e Crimina l Cod e commence d operation . I n th e cas e o f Commonwealt h offence s tha t ar e allege d t o hav e bee n committe d prio r t o 1 4 Decembe r 2001 , th e issu e i s t o b e determine d b y th e applicatio n o f th e commo n law .

A t commo n law , i n genera l terms , i t i s a questio n o f constructio n whethe r a n offenc e provisio n tha t doe s no t specif y a menta l elemen t nonetheles s require s proo f o f mens rea ; tha t is , knowledg e o r intentio n dependin g o n th e natur e o f th e offence . Th e presumptio n o r inferenc e i s tha t mos t offence s othe r tha n mino r regulator y offence s requir e proo f o f eithe r knowledg e o r intentio n o n th e par t o f th e d e f e n d a n t . M i n o r regulator y {o r stric t liability ) offence s d o no t requir e proo f o f knowledg e o r intention , thoug h a defendan t ma y raise , a s a defence , tha t the y m a d e a n hones t an d reasonabl e mistak e o f fact." ^ Whils t th e offenc e create d b y th e combine d operatio n o f regulation s 5 an d 4 2 migh t conceivabl y b e construe d a s a stric t liabilit y offence , havin g regar d t o th e potentia l penalty^i ^ th e bette r vie w i s tha t th e offenc e require s proo f o f a n intentio n (relevan t here ) t o bu y o r sel l foreig n currenc y (eithe r insid e o r outsid e Australia ) an d knowledg e tha t tha t purchas e o r sal e wa s no t authorise d b y th e Reserv e Bank .

I n th e cas e o f Commonwealt h offence s allege d t o hav e bee n committe d afte r 1 4 Decembe r 2001 , th e issu e i s deal t wit h b y sectio n 5. 6 o f th e Crimina l Code , whic h provide s tha t wher e a n offenc e provisio n doe s no t specif y a faul t elemen t fo r a physica l element , intentio n i s th e faul t elemen t fo r a physica l elemen t tha t consist s o f conduc t an d recklessnes s i s th e faul t elemen t i n respec t o f physica l element s tha t consis t o f a circumstanc e o r a result . Applyin g sectio n 5. 6 t o th e offenc e create d b y th e combine d operatio n o f r . 5 an d r . 4 2 o f th e Bankin g (Foreig n Exchange ) Regulations , i t

woul d b e necessar y t o prov e tha t th e defendan t intende d t o bu y o r sel l foreig n currenc y (eithe r i n o r outsid e Australia ) an d wa s reckles s abou t whethe r i t ha d th e authorit y o f th e Reserv e Bank .

I n th e presen t context , th e offenc e create d b y th e combine d operatio n o f r . 5 an d r . 4 2 woul d b e mad e ou t i f th e evidenc e i s capabl e o f provin g that :

(a ) th e defendan t (AW B o r it s relevan t officers ) either :

(i ) bough t o r sol d foreig n currenc y i n Australia ; o r

(ii ) a s a n Australia n residen t (o r actin g o n behal f o f a resident) , bough t o r sol d foreig n currenc y outsid e o f Australi a

(b ) i n orde r t o pay , o r facilitat e th e paymen t o f th e inlan d transportatio n fee s o r after-sales-servic e fees ; an d

(c ) th e defendan t intende d t o bu y o r sel l th e foreig n currenc y referre d t o i n (a) ;

Report of the Oil-for-Foo d Incjuiry 3 6 3

(d ) th e foreig n currenc y transactio n relate d t o a paymen t t o Iraq , it s agencie s o r national s —an d therefor e wa s exclude d fro m th e operatio n o f th e Reserv e Bank' s genera l authorit y b y reaso n o f th e 5 Apri l 199 1 variation ;

th e defendan t kne w (or , afte r 1 4 Decembe r 2001 , wa s reckles s a s t o whether ) tha t foreig n currenc y transactio n ha d no t bee n authorise d b y th e Reserv e Bank .

I n relatio n t o (c) , thi s woul d b e m a d e ou t i f th e evidenc e demonstrate d tha t th e foreig n currenc y obtaine d a s a resul t o f th e dealin g wa s pai d t o Ali a an d tha t Ali a wa s eithe r actin g a s a n agen t o f Iraq , o r tha t i t wa s pai d t o Ali a o n th e understandin g o r belie f

tha t Ali a woul d pa y th e mone y t o Ira q (les s an y relevan t commission) .

I n relatio n t o (d) , i t woul d no t b e necessar y t o prov e tha t th e defendan t kne w tha t suc h dealing s wer e prohibite d b y regulatio n 5 (o r wa s reckles s abou t thi s matter ) an d w a s therefor e unlawful . Mistak e o r ignoranc e o f th e la w i s n o d e f e n c e . i t may , however , b e necessar y t o prov e tha t th e defendan t kne w th e circumstance s whic h resulte d i n th e dealin g bein g outsid e th e operatio n o f th e genera l authorisatio n — tha t is , tha t th e dealin g relate d t o a paymen t t o Iraq , it s agencie s o r nationals .

AWB otherwise dealing in foreign currencies during this period I n Jun e 1984 , i n additio n t o fh e authoritie s tha t i t issued , th e Reserv e Ban k als o exempte d certai n transaction s fro m th e applicatio n o f r.5 . Thi s exemptio n wa s grante d pursuan t t o r.3 8 o f th e Bankin g (Foreig n Exchange ) Regulations . Thi s exemptioni^ ' w a s i n th e followin g terms :

Reserv e Ban k o f Australi a i n pursuanc e o f Regulatio n 3 8 o f th e Bankin g (Foreig n Exchange ) Regulation s hereb y exempt s fro m th e applicatio n o f sub-regulatio n 5(1 ) o f th e Regulation s

(a ) an y perso n who , eithe r o n hi s ow n behal f o r o n behal f o f anothe r person , borrows , lends , exchange s foreig n currenc y i n Australi a o r wh o otherwis e deal s (excep t b y wa y o f buyin g o r selling ) wit h foreig n currenc y i n Australia ;

(b ) an y resident , o r an y perso n actin g o n behal f o f a resident , wh o borrows , lend s o r exchange s foreig n currenc y outsid e Australi a o r wh o otherwis e deal s (excep t b y wa y o f buyin g o r selling ) wit h foreig n currenc y outsid e Australia ;

(c ) an y perso n who , eithe r o n hi s ow n behal f o r o n behal f o f anothe r person , buy s o r sell s foreig n currenc y i n th e for m o f coi n i n Australia ; an d

(d ) an y resident , o r an y perso n actin g o n behal f o f a resident , wh o buy s o r sell s foreig n currenc y i n th e for m o f coi n outsid e o f Australia . 12 2

Thi s exemptio n extended , relevantl y fo r presen t purposes , t o includ e an y perso n ' w h o otherwis e deal s (excep t b y w a y o f buyin g an d selling ) wit h foreig n currenc y i n Australia ' an d an y residen t o f Australi a (o r perso n actin g o n thei r behalf ) ' w h o otherwis e deal s (excep t b y buyin g o r selling ) wit h foreig n currenc y outsid e Australia' .

A s note d i n Chapte r 2 , thi s exemptio n wa s no t affecte d b y th e variation s m a d e o n 9 Augus t 199 0 an d 5 Apri l 199 1 t o th e Reserv e Bank' s genera l authorit y t o r . 5 . Ther e

3 6 4 Report of the Oil-for-Food liiquir} /

was also no similar amendment to the terms of the exemption, in particular so as to remove from the ambit of the exemption, dealings in foreign currency of the type described which relate to payments to the Government of Iraq, its agencies or its nationals.

Accordingly, a transaction in which a person deals with foreign currency in Australia *other than buying or selling it *is exempted from the application of r. 5(1) by reason of the June 1984 exemption. Moreover, this is so even if the transaction is made after April 1991 and relates to a payment to the Government of Iraq, its agencies or its nationals. Regulation 5(1) has no application to that transaction by reason of the exemption. A person entering into such a transaction after April 1991 does not thereby contravene r. 5(1), even if the transaction was for the purposes of or related to a payment to the Government of Iraq, its agencies or its nationals.

Further, a transaction in which an Australian resident deals with foreign currency outside of Australia *other than by buying or selling it *is similarly exempted from the application of r. 5(1) by reason of the June 1984 exemption, even if that overseas

transaction is made after April 1991 and relates to a payment to the Government of Iraq, its agencies or its nationals. Regulation 5(1) has no application to any such transaction by reason of the exemption and a person entering into such a transaction after April 1991, does not thereby contravene r. 5(1) even if for the purposes of or related to a payment to the Government of Iraq, its agencies or its nationals.

Regulation 5(7) There is a further observation that should be made in relation to the application of r. 5 to companies. This arises from sub-regulation 5(7).

Sub-regulation 5{7){b) provides in effect that where an Australian resident company has a place of business overseas, the company is deemed not to be a 'resident' for the purposes of r. 5 in relation to the affairs of the company conducted through that place of business, including any business carried on, transactions entered into and acts and things done by the company at or through that place of business.

AWB had an office in the United States. It also had a US incorporated subsidiary. For the purposes of any business conducted through either, AWB was not a 'resident' for the purposes of r. 5. Foreign currency transactions by that office or place of business and in relation to the affairs of that office or place of business may not fall within the prohibition in r. 5(1).

However, this provision is not likely to have any application to the transactions of AWB with which this Inquiry is concerned and which might have constituted a contravention of the Banking (Foreign Exchange) Regulations, namely the payment of inland transportation fees to Alia. This is because:

Report of the Oil-for-Food hiquiri/ 365

thos e transaction s wer e no t par t o f th e affair s o f AW B conducte d b y eithe r it s U S subsidiar y o r U S office . Rather , the y forme d par t o f th e affair s o f AWB' s busines s i n Austraha ;

th e foreig n currenc y payment s wer e incidenta l t o th e primar y transaction s — th e sal e o f whea t b y AW B t o 1 G B an d th e paymen t o f inlan d transportatio n fee s i n relatio n t o th e whea t whic h wa s sol d an d shippe d fro m Australia . Thes e transaction s wer e par t o f th e affair s o f AW B i n Australia . The y wer e no t par t o f

th e busines s o r th e affair s o f th e plac e o f busines s o f AWB' s U S subsidiar y o r U S office ;

th e decisio n an d directio n t o mak e thes e payment s wer e mad e b y AW B i n Australi a (i n it s Charterin g an d Internationa l Sale s an d Marketin g Divisions ) an d no t by , o r at , th e plac e o f busines s o f AWB' s U S subsidiar y o r U S office ; an d

th e payment s wer e mad e fro m fund s manage d an d maintaine d b y AW B Treasur y i n Australi a an d no t b y anyon e a t th e plac e o f busines s o f AWB' s U S subsidiar y o r U S office .

After n March 2002

Regulatio n 5 wa s amende d b y th e Bankin g (Foreig n Exchange ) Regulation s 2002 , effectiv e fro m 1 1 Marc h 2002 . Sub-regulation s 5(1) , (2) , (3 ) an d (4 ) wer e substitute d an d a ne w sub-regulatio n 5(4A ) wa s added .

Relevantly , r . 5 a s amende d provided :

(1 ) Th e Ban k may , i n writing , direc t a person :

(a ) no t t o buy , borrow , sell , len d o r exchang e foreig n currenc y i n Australi a (o n th e person' s ow n behal f o r o n behal f o f anothe r person) ; o r

(b ) no t t o dea i wit h foreig n currenc y i n an y othe r wa y i n Australia .

(2 ) Th e Ban k may , i n writing , direc t a resident , o r a perso n actin g o n behal f o f a resident :

(a ) no t t o buy , borrow , sell , len d o r exchang e foreig n currenc y outsid e Australia ; o r

(b ) no t t o dea l wit h foreig n currenc y i n an y othe r wa y outsid e Australia .

(3 ) Th e Ban k may , i n writing , direc t a perso n no t t o b e a part y t o a transactio n if :

(a ) either :

(i ) th e transactio n take s plac e i n whol e o r i n par t i n Australia ; o r

(ii ) a residen t i s a part y t o th e transaction ; an d

(b ) th e transaction :

3 6 6 Report of the Oil-for-Food liiquir}/

(i) has the effect of, or involves, a purchase, borrowing, sale, loan or exchange of foreign currency; or

(ii) otherwise relates to foreign currency.

The effect of this amendment was to remove from the Banking (Foreign Exchange) Regulations any general prohibition in relation to dealings in foreign exchange and replace it with a power on the part of the Reserve Bank to issue directions to a person that they not engage in, or be a party to, certain dealings relating to foreign currency.

On 5 April 2002, the Reserve Bank issued a direction pursuant to r. 5 in the following terms:

The Reserve Bank of Australia pursuant to Regulation 5 of the Banking (Foreign Exchange) Regulations hereby directs that:

1. a person must not, either on the person's own behalf or on behalf of another person, buy, borrow, sell, lend or exchange foreign currency in Australia, or otherwise deal with foreign currency in any other way in Australia;

2. a resident, or a person acting on behalf of a resident, must not buy, borrow, sell, lend or exchange foreign currency outside Australia, or otherwise deal with foreign currency in any other way outside Australia;

3. a person must not be a party to a transaction, being a transaction that takes place in whole or in part in Australia or to which a resident is a party, that has the effect of, or involves, a purchase, borrowing, sale, loan or exchange of foreign currency, or otherwise relates to foreign currency

where the transaction relates to property, securities or funds in Australia belonging either directly or indirectly to, or other payments to, the Government of Iraq, its agencies or its nationals.

All such transactions are prohibited without specific prior approval of the Reserve Bank of Australia.

On the same day, the Reserve Bank also revoked its earlier exemption to r. 5 dated 21 June 1984.

It is to be recalled that r. 42 provides that a person shall not contravene or attempt to contravene or fail to comply with 'any of the provisions of these regulations'.

Whilst the intention of the drafters of the new r. 5 may have been that a direction issued by the Reserve Bank pursuant to that regulation would have the same effect as a prohibition in the Banking (Foreign Exchange) Regulations themselves, so that a failure to comply with the direction would amount to a contravention of the Regulations and therefore an offence against r. 42, arguably there is a lacuna in the Regulations that prevents the regulatory scheme from having that effect. Although r. 5 confers a power on the Reserve Bank to issue directions, only the direction itself prohibits transactions that fall within the terms of the direction. Nothing in the

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Regulation s provide s tha t a perso n i s oblige d t o compl y wit h suc h a direction , o r tha t suc h a directio n ha s th e statu s o f a regulation , o r tha t a contraventio n o f suc h a directio n amount s t o a contraventio n o f th e Regulations . I f th e directio n itsel f doe s no t hav e th e statu s o f a regulation , i t woul d follo w tha t a failur e t o compl y wit h a directio n ma y no t amoun t t o a contraventio n o f r . 5 , o r an y othe r provisio n i n th e Regulations , an d tha t therefor e doe s no t constitut e a n offenc e agains t r . 42 .

If , however , a s a matte r o f construction , a failur e t o compl y wit h a directio n unde r r . 5 doe s amoun t t o a contraventio n o f r . 5 itself , th e combinatio n o f rr . 5 an d 4 2 an d th e directio n issue d b y th e Reserv e Ban k o n 5 Apri l 200 2 create s offence s wit h element s simila r t o th e offence s tha t existe d prio r t o th e amendmen t o f r . 5 o n 1 0 Marc h 2002 .

Th e element s o f th e offence s are , i n th e cas e o f transaction s occurrin g i n Australia :

(1 ) th e defendant , eithe r o n hi s ow n behal f o r o n behal f o f anothe r person , bought , borrowed , sold , lent , exchange d i n Australi a o r otherwis e deal t i n Australi a wit h foreig n currency ;

(2 ) i n relatio n t o a paymen t t o th e Governmen t o f Iraq , it s agencie s o r it s

nationals ;

(3 ) withou t th e specifi c prio r approva l o f th e Reserv e Ban k o f Australi a

i n contraventio n o f th e directio n issue d b y th e Reserv e Ban k o n 5 Apri l 200 2 an d thereb y r . 5 .

I n th e cas e o f transaction s occurrin g outsid e Australia , th e offenc e ha s th e followin g elements :

(1 ) th e defendan t wa s a residen t (o r wa s actin g o n behal f o f a resident ) o f Australia ;

(2 ) wh o bought , borrowed , sold , lent , exchange d outsid e Australi a o r otherwis e deal t outsid e Australi a wit h foreig n currency ;

(3 ) i n relatio n t o a paymen t t o th e Governmen t o f Iraq , it s agencie s o r it s

nationals ;

(4 ) withou t th e specifi c prio r approva l o f th e Reserv e Ban k o f Australi a

i n contraventio n o f th e directio n issue d b y th e Reserv e Ban k o n 5 Apri l 200 2 an d thereb y r . 5 .

Proo f o f thes e element s woul d no t b e dissimila r t o th e proo f o f th e element s o f th e offence s base d o n r . 5 i n th e for m i n whic h i t appeare d prio r t o 1 1 Marc h 2002 , a s ha s alread y bee n considered .

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Referenc e agai n need s f o b e mad e t o r . 5(7 ) i n thi s contex t —i n particula r referenc e need s t o mad e t o th e appHcatio n o f r . 5(2 ) an d wh o ma y b e a 'resident ' fo r tha t purpose . Thi s i s agai n no t hkel y t o hav e an y relevan t applicatio n t o th e particula r

foreig n currenc y transaction s o f AW B wit h whic h thi s Inquir y i s concerne d i n th e applicatio n o f r . 5 afte r 1 1 Marc h 2002 . Thi s i s because :

 thos e transaction s wer e no t par t o f th e affair s o f AW B conducte d b y eithe r it s U S subsidiar y o r U S office , bu t wer e instea d par t o f th e affair s o f AWB' s busines s i n Australia ;

 th e foreig n currenc y payment s wer e incidenta l t o th e primar y transaction s —th e sal e o f whea t b y AW B t o 1G B an d th e paymen t o f inlan d transportatio n fee s i n relatio n t o th e whea t whic h wa s sol d an d shippe d fro m Australia . Thes e transaction s wer e par t o f th e affair s o f AW B i n Australia . The y wer e no t par t o f th e busines s o r th e affair s o f th e plac e o f busines s o f AWB' s U S subsidiar y o r U S office ;

 th e decisio n an d directio n t o mak e thes e payment s wer e mad e b y AW B i n Australi a (i n it s Internationa l Sale s an d Marketin g Division ) an d processe d throug h AW B Treasury ; an d

al l o f th e inlan d transportatio n fee s pai d b y AW B afte r 1 1 Marc h 200 2 an d unti l th e incursio n int o Ira q i n Marc h 200 3 wer e pai d i n euros , fro m a eur o accoun t tha t AW B maintaine d wit h th e Commonwealt h Ban k i n Sydney .

Bankin g (Foreig n Exchange ) Regulations—regulation s 6 an d 4 2

A t al l relevan t time s regulatio n 6 o f th e Bankin g (Foreig n Exchange ) Regulation s provide d a s follows :

(1 ) A perso n shal l not , excep t wit h th e authorit y o f th e Bank , tak e o r sen d ou t o f Australi a an y Australia n currenc y o r foreig n currency , othe r tha n foreig n currenc y obtaine d unde r th e las t precedin g regulation .

(2 ) Nothin g i n thi s regulatio n shal l appl y t o a mone y orde r issue d i n Australi a an d payabl e outsid e Australia .

Regulatio n 6 proscribe s th e takin g o r sendin g o f currenc y ou t o f Australia . I t i s concerne d wit h tw o situations . Th e firs t concern s Austraha n currency ; th e secon d concern s foreig n currency .

Application of r.6 to Australian currcnci/

Regulatio n 6 prohibit s th e takin g o r sendin g o f Australia n currenc y ou t o f Australia , excep t wit h th e authorit y o f th e Reserv e Ban k o f Australia . O n 2 9 Jun e 199 0 th e Reserv e Ban k issue d a n exemptio n fro m th e applicatio n o f r . 6 ( 1 ) . T h i s cam e int o operatio n o n 1 Jul y 1990 . Th e effec t o f th e exemptio n wa s t o exemp t 'fro m th e

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applicatio n o f subregulafio n 6(1 ) o f th e Regulation s th e takin g o r sendin g ou t o f Australi a b y a perso n o f an y Australia n currency' .

O n 9 Augus t 199 0 thi s exemptio n wa s varie d s o tha t i t woul d no t appl y t o dealing s relatin g t o th e Government s o f Kuwai t o r Iraq , thei r agencie s o r n a t i o n a l s . ^ ^ ^ Th e variatio n cam e int o operatio n o n th e sam e date . O n 5 Apri l 199 1 th e variatio n wa s revoke d an d replace d b y anothe r variation , whic h applie d exclusivel y t o dealing s wit h Ira q rathe r tha n Ira q and K u w a i t . T h i s variatio n cam e int o operatio n o n 5 Apri l 1991.12 6 effec t o f thes e variation s wa s tha t takin g o r sendin g ou t o f Australi a o f Austraha n currenc y associate d wit h dealing s relatin g t o Iraq , it s agencie s o r national s wa s n o longe r exempte d fro m r . 6 ; i t wa s n o longe r possibl e t o sen d o r tak e Australia n currenc y ou t o f Australi a i n relatio n t o suc h dealing s withou t th e specifi c approva l o f th e Reserv e Bank . Thes e variation s wer e no t revoke d unti l 2 9 Ma y 2003.'2 7

Thi s aspec t o f r . 6 i s unlikel y t o hav e an y applicatio n t o AWB . Th e evidenc e befor e th e Inquir y doe s no t disclos e tha t i t too k o r sen t an y Australia n currenc y ou t o f Australi a fo r th e purpose s o f th e p a y m e n t o f an y inlan d transportatio n fees . Al l AWB' s payment s o f inlan d transportatio n fee s wer e pai d i n currencie s othe r tha n Australia n

dollars .

Although , i f i t wer e t o b e f o u n d tha t AW B ha d take n o r sen t Australia n currenc y overseas , fo r exampl e fro m it s Australia n dolla r ban k account s i n Australi a t o it s U S dolla r account s hel d overseas , an d converte d i t int o foreig n currenc y oversea s i n orde r t o pa y th e inlan d transportatio n fees , the n th e remittanc e o f th e Australia n currenc y

betwee n Apri l 199 1 an d Ma y 200 2 ma y amoun t t o a contraventio n o f r.6 . Tha t i s provide d tha t th e remittanc e o f th e Australia n currenc y wa s sufficientl y closel y connecte d t o th e transactio n wit h Iraq . If , however , AW B sen t Australia n dollar s fro m Australi a t o (fo r example ) th e Unite d State s wher e the y wer e converte d t o U S dollar s an d pai d int o it s U S dolla r accoun t fo r th e purpose s o f tha t accoun t generally , o r t o to p u p tha t account , the n thos e remittance s ma y no t a m o u n t t o a contraventio n o f r . 6 eve n i f som e o f thos e f u n d s wer e late r use d fo r makin g payment s t o Iraq . I n tha t latte r situation , th e mor e genera l natur e fo r fh e transfe r ma y b e sufficien t t o seve r an y causa l connectio n betwee n fh e remittanc e an d th e payment . Ultimately , thi s w o u l d b e a questio n o f fac t t o b e determine d b y referenc e t o th e particula r circumstance s o f th e particula r transaction .

Application of r.6 to foreign currencies

Ther e ar e tw o aspect s t o th e possibl e applicatio n o f r. 6 t o foreig n currencie s i n th e contex t o f th e transaction s considere d b y thi s Inquiry .

Th e firs t i s tha t r . 6 onl y prohibit s takin g o r sendin g foreig n currenc y ou t o f Australia . I t ha s n o applicatio n t o th e remittanc e o f foreig n currenc y b y a n Australia n o r Australia n residen t f r o m a plac e outsid e o f Australi a t o anothe r plac e outsid e Australia . I t therefor e ha s n o applicatio n t o payment s mad e f r o m foreig n currenc y tha t i s no t hel d i n Australi a an d i s no t pai d fro m Australia , eve n i f th e paymen t i s m a d e b y a n Australian . T o th e exten t tha t inlan d transportatio n fee s wer e pai d b y

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AWB in US dollars from US dollar accounts that it held outside of Australia, those payments were not subject to r.

However, as has already been observed in Chapter 26, from May 2001 AWB also paid inland transportation fees in foreign currencies (Deutschmarks and euros) from Australia via the banking systemJ^^ It is therefore necessary to consider whether r. 6 may have some potential application to those transactions.

The second relates to some possible problems in the construction and application of r. 6 to the sending or taking out of foreign currency. These problems stem from the language of r. 6 which excludes 'foreign currency obtained under the last preceding regulation' from the general prohibition otherwise provided for by that regulation (in respect of foreign currencies). The reference to the 'last preceding regulation' is a reference to r. 5. To consider the implications of this question to the application of r. 6, it is again necessary to look at the situation both prior to and after the amendment of r. 5 on 11 March 2002.

Prior to n March 2002

Prior to 11 March 2002, r. 5 prohibited certain specified dealings of foreign currency (including the purchase of foreign currency) except with the authorisation of the Reserve Bank. Whilst r. 5 in this form did not directly provide a mechanism for 'obtaining' foreign currency for the purposes of r. 6, it is possible to construe r. 5 as permitting the obtaining of foreign currency with the authority of the Reserve Bank. That being so, foreign currency obtained without the authority of the Reserve Bank would not have been 'obtained under' r. 5.

The general authority and the variation to the general authority under r. 5 have already been considered. In short, after April 1991, any foreign currency purchased in Australia or by an Australian resident overseas in relation to any payment to the Government of Iraq, its agencies or its nationals, was not authorised by the Reserve Bank and (on the construction suggested above) not obtained under r. 5. It follows that r. 6 prohibited the sending out of Australia of any foreign currency obtained in these circumstances. Any contravention of this prohibition would be an offence under r. 42.

Because, in these circumstances, any contravention of r. 6 requires, in effect, proof of a prior contravention of r. 5 (that is, purchasing the foreign currency without the authority of the Reserve Bank), r. 6 is of limited utility, for present purposes. On each

occasion that inland transportation fees were paid from Australia in foreign currency acquired in Australia prior to 11 March 2002, this would involve both a contravention of r. 5 (in relation to the purchase of the foreign currency) and a contravention of r. 6 (in relation to the transfer of the foreign currency out of Australia), both of which would amount to offences under r. 42.

Equally, if the foreign currency that was taken or sent from Australia was acquired through a means falling within the exemption to r. 5 dated 21 June 1984"", then it is

Report of the Oil-for-Food Incjuiry 371

als o likel y tha t thi s woul d no t amoun t t o a contraventio n o f r . 6 . Tha t i s o n th e basi s tha t foreig n currenc y acquire d consisten t wit h th e exemptio n t o r . 5 i s foreig n currenc y tha t ha s bee n obtaine d unde r tha t regulation , fo r th e purpose s o f r . 6 . Tha t foreig n currenc y ha s als o bee n obtaine d i n effec t wit h th e 'approval ' o f th e Reserv e Ban k b y reaso n o f th e operatio n o f th e Reserv e Bank' s exemptio n t o th e regulation . T o conclud e otherwis e woul d requir e a ver y narro w constructio n o f th e word s 'obtaine d under ' whe n use d i n r . 6 . I t woul d b e necessar y t o argu e that , strictl y speaking , th e foreig n currenc y s o acquire d wa s no t obtaine d unde r r . 5 , bu t obtaine d unde r a n exemptio n t o it s application . Bu t i t wa s nevertheles s obtaine d i n a manne r no t prohibite d b y r . 5 an d thereb y acquire d analogousl y t o th e foreig n currenc y acquire d pursuan t t o th e Reserv e Bank' s genera l approval .

A fter n March 2002

Afte r Marc h 2002 , r . 5 provide d tha t th e Reserv e Ban k coul d direc t person s no t t o engag e o r b e a part y t o certai n transaction s concernin g foreig n currency . I t i s difficul t t o se e ho w an y foreig n currenc y coul d b e 'obtaine d under ' r . 5 fo r th e purpose s o f r . 6 .

Th e onl y constructio n o f r . 5 tha t give s som e meanin g t o th e word s 'othe r tha n foreig n currenc y obtaine d uncie r th e las t precedin g regulation ' i n r . 6 i s tha t r . 5 (afte r 1 1 IVIarc h 2002 ) amount s t o a genera l authorisatio n t o purchas e foreig n currenc y s o lon g a s th e transactio n i s no t subjec t t o a directio n issue d b y th e Reserv e Bank . I f thi s constructio n i s accepted , an y purchas e o f foreig n currenc y tha t wa s contrar y t o suc h a directio n wa s no t 'obtaine d under ' r . 5 an d wa s therefor e subjec t t o th e prohibitio n agains t transfe r fro m Australi a i n r . 6 .

Th e 5 Apri l 200 2 directio n no t t o dea l wit h foreig n currenc y wher e th e dealin g relate s t o a paymen t t o Ira q ha s bee n considere d abov e i n th e contex t o f r . 5 . Th e purchas e o f foreig n currenc y i n relatio n t o a paymen t t o th e Governmen t o f Iraq , it s agencie s o r it s national s woul d b e contrar y t o tha t directio n an d therefore , o n th e basi s o f th e constructio n o f r . 5 identifie d earlier , no t 'obtaine d under ' tha t regulation . Foreig n currenc y obtaine d i n thes e circumstance s woul d therefor e b e subjec t t o fh e prohibitio n i n r . 6 . Sendin g suc h foreig n currenc y oversea s woul d contraven e r . 6 an d b e a n offenc e unde r r . 42 . Tha t woul d b e s o eve n if , fo r th e reason s give n above , th e purchas e o f foreig n currenc y contrar y t o th e 5 Apri l 200 2 directio n ma y no t amoun t t o a contraventio n o f regulatio n 5 an d therefor e a n offenc e unde r r . 4 2 o n tha t basis .

Thi s analysi s depends , however , o n a n acceptanc e o f wha t o n on e vie w i s a fairl y straine d constructio n o f rr . 5 an d 6 . Th e potentia l difficultie s surroundin g th e constructio n o f thes e regulation s afte r 1 1 Marc h 200 2 ma y presen t difficultie s i n an y prosecutio n proceeding s base d o n a contraventio n o f thes e regulation s o r th e underlyin g direction s o r authoritie s issue d b y th e Reserv e Bank .

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Bankin g (Foreig n Exchange ) Regulations—regulation s 8 an d 4 2

Regulatio n 8{l){a ) o f th e Bankin g (Foreig n Exchange ) Regulation s 195 9 provide s that :

(1 ) Subjec t t o tlii s regulation , a perso n slial l not , excep t wit h th e authorit y o f th e Bani< :

(a ) mali e an y paymen t i n Australi a to , b y th e orde r of , o r o n behal f of , a perso n wh o i s no t a residen t o r plac e an y su m i n Australi a t o th e credi t o f an y suc h person ;

O n 2 9 Jun e 199 0 th e Reserv e Ban k issue d a n exemptio n fro m th e applicatio n o f thi s regulation'-^ ! w^hic h cam e int o operatio n o n 1 Jul y 199 0 an d whic h provide d tha t th e Reserv e Bank :

.. . exempt s fro m th e applicatio n o f subregulatio n 8(l)(a } o f th e Regulation s a perso n wh o make s an y paymen t i n Australi a to , b y th e orde r of , o r o n behal f o f a perso n wh o i s no t a residen t o r place s an y su m i n Australi a t o th e credi t o f an y suc h person .

O n 9 Augus t 199 0 thi s exemptio n wa s varie d s o tha t i t di d no t appl y t o transaction s i n connectio n wit h th e government s o f Kuwai t o r Iraq , thei r agencie s o r nationals . p^i s variatio n cam e int o operatio n o n th e sam e date.'^ ^ O n 5 Apri l 199 1 thi s variatio n wa s revoke d an d replace d wit h anothe r variation , whic h applie d exclusivel y t o dealing s wit h Ira q rathe r tha n Ira q and K u w a i t . ^ ^ ^ phi g variatio n cam e int o operatio n o n 5 Apri l 1991.1^ 5 j b e Reserv e Ban k revoke d it s variatio n o f thi s exemptio n o n 2 8 Ma y 2003.1^ 6

Regulatio n 8 i s concerne d wit h th e makin g o f a proscribe d paymen t 'i n Australia' . Ther e i s n o evidenc e befor e thi s Inquir y tha t AW B m a d e an y paymen t o f th e typ e contemplate d b y tha t regulation . Accordingly , ther e doe s no t appea r t o b e an y basi s o n whic h i t ma y b e sai d tha t AW B migh t hav e contravene d tha t regulation .

Th e Custom s Ac t 190 1 an d th e Custom s (Prohibite d Exports ) Regulation s

Th e othe r mean s b y whic h th e relevan t Securit y Counci l Resolution s wer e implemente d domesticall y wa s t o prohibi t export s t o Ira q vi a th e Customs Act an d th e Customs (Prohibited Exports) Regulations. Sectio n 11 2 o f th e Customs Act provide s tha t th e Governor-Genera l may , b y regulation , prohibi t th e exportatio n o f good s fro m Australia . Good s th e exportatio n o f whic h i s s o prohibite d ar e 'prohibite d exports. ' Fro m 1 7 Jun e 199 9 t o 3 0 Jun e 2002 , regulatio n 13C A o f th e Custom s (Prohibite d Exports ) Regulation s provide d a s follows :

(1 ) Excep t i n accordanc e wit h a permissio n grante d unde r subregulatio n (2) , a perso n mus t not :

(a ) expor t good s i f th e immediat e o r fina l destinatio n o f th e good s is , o r i s intende d t o be, th e Republi c o f Iraq ; o r

(b ) expor t good s tha t originate d (wholl y o r i n part ) i n th e Republi c o f Iraq .

(2 ) th e Ministe r o f Stat e fo r Foreig n Affair s an d Trad e (i n thi s regulatio n calle d th e Minister ) ma y gran t a permissio n fo r th e exportatio n o f specifie d goods , o r good s o f a

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specifi c kind , wher e th e exportatio n withou t th e permissio n woul d contraven e subregulatio n (1) , i f th e Ministe r i s satisfie d tha t permittin g th e exportatio n wil l no t infring e th e internationa l obligation s o f Australia .

(3 ) A permissio n grante d unde r subregulatio n (2 ) ma y specify , i n relatio n t o th e exportatio n o f good s tha t i t permits :

(a ) condition s o r requirements , includin g time s fo r compliance , t o whic h th e exportatio n i s subject ; an d

(b ) th e quantit y o f good s tha t ma y b e exported ; an d

(c ) th e circumstance s i n whic h good s ma y b e exported .

(4 ) Th e Ministe r ma y revok e o r modif y a permissio n grante d unde r subregulatio n (2 ) i f th e Ministe r i s satisfie d o n reasonabl e ground s that :

(a ) a conditio n o r requiremen t o f th e permissio n ha s no t bee n complie d wit h or , unles s modified , i s unlikel y t o b e complie d with ; o r

(b ) permitting , o r continuin g t o permit , th e exportatio n o f good s i n accordanc e wit h th e permissio n woul d infring e th e internationa l obligation s o f Australia .

(5 ) th e power s o f th e Ministe r unde r thi s regulatio n ma y b e exercise d b y a perso n authorise d i n writin g b y th e Ministe r t o exercis e thos e powers .

Mino r amendment s t o subregulation s 13CA(2 ) an d (4 ) wer e effecte d b y th e Custom s (Prohibite d Exports ) A m e n d m e n t Regulation s 200 2 (No . 2) . Th e amendment s commence d o n 1 Jul y 2002 . ^^ ^ Th e essentia l effec t o f thes e amendment s wa s t o substitut e 'th e Foreig n Minister ' fo r reference s t o 'Th e Ministe r o f Stat e fo r Foreig n Affair s an d Trade ' an d 'th e Minister' .

I t follow s tha t good s th e immediat e o r fina l destinatio n o f whic h wa s Ira q wer e prohibite d export s unles s th e Ministe r ha d grante d a permissio n t o expor t i n relatio n t o th e good s unde r subregulatio n 13CA(2 ) an d tha t permissio n ha d no t bee n revoke d unde r subregulatio n 13CA(4) . Th e exportatio n o f prohibite d export s i s a n offenc e unde r sectio n 233(1)(c ) o f th e Customs Act.

Al l o f th e good s exporte d b y fh e thre e relevan t companie s wer e th e subjec t o f permission s grante d unde r subregulatio n 13CA(2) . Non e o f th e permission s wer e revoke d unde r subregulatio n 13CA(4) . Th e good s wer e accordingl y no t prohibite d export s an d n o offenc e wa s committe d unde r sectio n 233(l)(c ) o f th e Customs Act.

Th e onl y possibl e basi s fo r an y suggestio n tha t a n offenc e unde r sectio n 233(l)(c ) o f th e Custom s Ac t ma y hav e bee n committe d i s that , i f th e permission s wer e obtaine d a s a resul t o f frau d o r misrepresentatio n o n th e par t o f an y o f th e relevan t companies , a s a matte r o f publi c la w th e permission s coul d b e declare d invali d an d voi d ab initio. Unti l declare d void , however , th e permission s remai n i n force . Ther e hav e bee n n o proceeding s t o declar e an y o f th e permission s invalid .

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It must also be regarded as doubtful that a declaration, made after the date of the export to which the permission related, that the permission was void ah initio could support a prosecution based on the allegation that there was no permission at the time of export. It is unnecessary to decide this issue because if the central allegation is that the permission was obtained as a result of fraud or misrepresentation, it plainly would be preferable to prosecute for offences directly relating to that fraud or misrepresentation (considered above), rather than the offence under s 233(l)(c) of the Customs Act.

Offences under the Corporations Law and Corporations Act

In the case of AWB, there are some potentially relevant offences (or civil penalty provisions) in the Corporations Act, including offences previously in the Corporations Law that are, in effect, taken to be included in the Corporations Act 2001 by reason of the transitional provisions in sections 1400 and 1401 of the Corporations Act.^^"^

There are three broad areas where Corporations Act offences are potentially applicable. First, offences under the Act may have been committed if it is found that any officers of AWB provided false or misleading information to the directors in relation to the various contracts and arrangements with Iraq, including the recouping of the Tigris debt. Second, offences might have been committed if it is found that officers of AWB falsified books in relation to any of the relevant transactions. Third, offences or civil contraventions of the Corporations Act may have been committed if it were found that, in causing or permitting AWB to enter into the relevant arrangements with Iraq, officers of AWB failed to act in accordance with the statutory duties to act in good faith in the best interests of the company, to act for proper purposes and to exercise care and dihgence.

Section 1309 of the Corporations Act

The context in which the potential availability of the offence created by section 1309 of the Corporations Act is to be considered is the provision of information by senior management to the AWB board of directors, in particular during 2003 and 2004, concerning the nature of the relevant dealings with Iraq and Alia, including the recovery of the Tigris debt, and the various investigations conducted by management, and persons retained by it, in relation to those matters. The key factual issue is whether this information was in any respect false or misleading.

At all material times section 1309 of the Corporations Act relevantly provided as follows:

(1) An officer of a corporation wiio malces available or gives information, or authorises or permits the making available or giving of information, to:

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(a ) a director , auditor , member , debentur e holder , o r truste e fo r debentur e holder s o f th e corporation ; o r

(b ) i f th e corporatio n i s take n fo r th e purpose s o f Chapte r 2 M t o b e controlle d b y anothe r corporatio n — a n audito r o f th e othe r corporation ; o r

(c ) a n operato r o f a financia l marke t (whethe r th e marke t i s operate d i n Australi a o r elsewhere ) o r a n office r o f suc h a market ;

bein g information , whethe r i n documentar y o r an y othe r form , tha t relate s t o th e affair s o f th e corporatio n an d that , t o th e knowledg e o f th e officer :

(d ) i s fals e o r misleadin g i n a materia l particular ; o r

(e ) ha s omitte d fro m i t a matte r o r thin g th e omissio n o f whic h render s th e informatio n misleadin g i n a materia l respect ;

i s guilt y o f a n offence .

Th e element s o f th e offenc e create d b y subsectio n 1309(1) , relevan t t o th e matte r a t hand , ar e a s follows :

(1 ) th e defendan t wa s a n office r o f a corporation ; an d

(2 ) th e defendan t mad e availabl e (o r furnished , o r authorise d th e makin g availabl e o r furnishing , o r permitte d th e makin g availabl e o r furnishing ) o f information ;

(3 ) t o [relevantly ] a director ;

(4 ) bein g informatio n that ;

(a ) relate d t o th e affair s o f th e corporation ; an d

(b ) t o th e knowledg e o f th e office r wa s either :

(i ) fals e o r misleadin g i n a materia l particular ; o r

(ii ) ha d omitte d fro m i t a matte r o r thin g th e omissio n o f whic h rendere d th e informatio n misleadin g i n a materia l respect .

Subsectio n 1309(2 ) create s a simila r offenc e wit h a lesse r menta l element . Unlik e th e subsectio n 1309(1 ) offence , t o mak e ou t th e offenc e unde r subsectio n 1309(2 ) i t i s unnecessar y t o prov e tha t th e office r kne w th e informatio n t o b e fals e o r misleading . I t i s necessar y onl y t o prov e tha t fh e office r faile d t o tak e reasonabl e step s t o ensur e tha t

th e informatio n wa s no t fals e o r misleading . Subsectio n 1309(2 ) provide s a s follows :

(2 ) A n office r o f a corporatio n wh o make s availabl e o r give s information , o r authorise s o r permit s th e makin g availabl e o r givin g o f information , to :

3 7 6 Report of the Oil-for-Food liiquir} /

(a) a director, auditor, member, debenture holder, or trustee for debenture holders of the corporation; or

(b) if the corporation is taken for the purposes of Chapter 2IV1 to be controlled bv another corporation *an auditor of the other corporation; or

(c) an operator of a financial market (whether the market is operated in Australia or elsewhere) or an officer of such a market;

being information, whether in documentary or any other form, that relates to the affairs of the corporation and that;

(d) is false or misleading in a material particular; or

(e) has omitted from it a matter or thing the omission of which renders the information misleading in a material respect;

without having taken reasonable steps to ensure that the information:

(f) was not false or misleading in a material particular; or

(g) has omitted from it a matter or thing the omission of which renders the information misleading in a material respect

is guilty of an offence.

The elements of the offence created by subsection 1309(2), relevant to the matter at hand, are as follows:

(1) the defendant was an officer of a corporation; and

(2) the defendant made available (or furnished, or authorised the making available or furnishing, or permitted the making available or furnishing) of information;

(3) to [relevantly] a director;

(4) being information that;

(a) related to the affairs of the corporation; and

(b) to the knowledge of the officer was either:

(i) false or misleading in a material particular; or

(u) had omitted from it a matter or thing the omission of which rendered the information misleading in a material respect; and

(5) the defendant failed to take reasonable steps to ensure that the information:

Report of the Oil-for-Food hiquiri/ 377

(a ) wa s no t fals e o r misleadin g i n a materia l particular ; o r

(b ) di d no t hav e omitte d fro m i t a matte r o r thin g th e omissio n o f whic h render s th e informatio n misleadin g i n a materia l respect .

I n relatio n t o th e firs t elemen t o f thes e offences , 'officer ' i n relatio n t o a bod y corporat e i s define d i n sectio n 82 A o f th e Corporation s Ac t t o includ e a director , secretary , executiv e office r o r employe e o f th e bod y o r entity . A t al l materia l times , a n executiv e office r i n relatio n t o a bod y wa s define d i n sectio n 9 a s meanin g a perso n wh o wa s concerne d in , o r too k par t i n th e managemen t o f th e bod y (regardles s o f th e person' s designatio n an d whethe r o r no t th e perso n wa s a directo r o f th e body) . I n CAC v BrachV"^ ^ Ormisto n J sai d tha t th e definitio n o f executiv e office r pointe d t o activitie s whic h involve d polic y an d decisio n makin g relate d t o th e busines s affair s o f th e corporation , an d tha t affecte d th e corporatio n a s a whole , o r a substantia l par t o f tha t corporation , t o th e exten t tha t th e consequence s o f th e formatio n o f thos e policie s o r th e makin g o f thos e decision s ma y hav e som e significan t bearin g o n th e financia l standin g o f th e corporatio n o r th e conduc t o f it s affairs . Sectio n 9 o f th e Ac t als o include s a definitio n o f 'officer ' tha t cover s person s wh o woul d fal l withi n Ormisto n J' s constructio n o f th e definitio n o f 'executiv e officer. '

Th e secon d an d thir d element s o f th e sl30 9 offence , whic h ar e th e ma