Cole Inquiry
Encyclopedia
The Cole Inquiry, formally the Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme was a Royal Commission
set up by the Government of Australia
in November 2005. Its purpose was to investigate "whether decisions, actions, conduct or payments by Australian companies mentioned in the Volcker Inquiry
into the United Nations
Oil-for-Food Programme
breached any Federal, State or Territory law." The Volcker Inquiry was set up to investigate the systematic corruption of the Oil for Food program by Saddam Hussein
.
The commission's five volume report was tabled in parliament
on 27 November 2006
Independent Inquiry Committee was formed to investigate allegations of corruption and fraud in the UN Oil-for-Food Programme. Paul Volcker's report, released in October 2005, found that AWB was the biggest single source of kickbacks made to the Iraqi government. In exchange for trouble-free disembarkation of wheat purchased under the Oil for food program, AWB paid 'trucking charges' totaling A$300 million to Alia, a Jordan
ian trucking company. Volcker found that Alia kept a small percentage of the 'charges', and passed the remainder to the government of Saddam Hussein
.
An accompanying statement released with the report by the Secretary-General of the United Nations, Kofi Annan
requested that “national authorities take steps to prevent the recurrence of such practices in the future and that they take action, where appropriate, against companies falling within their jurisdiction.” http://www.ag.gov.au/agd/www/UNoilforfoodinquiry.nsf
issued on 10 November 2005 the commission was asked to inquire into and report on:
(a) whether any decision, action, conduct, payment or writing of any of the three Australian companies mentioned in the Final Report (“Manipulation of the Oil-for-Food Programme by the Iraqi Regime”) of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme, or any person associated with one of those companies, might have constituted a breach of any law of the Commonwealth, a State or Territory; and
(b) if so, whether the question of criminal or other legal proceedings should be referred to the relevant Commonwealth, State or Territory agency. http://www.ag.gov.au/agd/WWW/UNOilForFoodInquiry.nsf/Page/Terms_of_Reference
QC
a former Judge of Appeal of the New South Wales Supreme Court. The Cole Inquiry was the second Royal Commission
Cole had headed. The 2001-2003 Royal Commission is commonly referred to as the "Cole Royal Commission" hence to avoid confusion the 2005-06 Royal Commission is commonly referred to as the "Cole Inquiry".
Cole was supported by John Agius SC
, Counsel Assisting and three other barristers, Gregory Nell, Michael Wigney and Miles Condon.
The three Australian companies adversely mentioned in the UN report (AWB Limited
, Alkaloids of Australia Pty Limited, and Rhine Ruhr Pty Ltd) were granted leave to be represented by counsel before the Royal Commission
The commission's public hearings commenced on 16 January 2006. During the first six weeks of public hearings evidence led by Agius and cross examination by him of witnesses brought out a series of revelations that showed the conduct of AWB Limited
's executives and directors in a very poor light. Apart from interrupting assisting counsel's question to ask witnesses his own probing questions, Cole frequently made reproving comments about the behaviour and evidence of witnesses particularly those in responsible and often highly remunerative positions with AWB Limited and the Wheat Export Authority
, who among other things frequently claimed memory loss, inability to locate diaries and notes and notoriously, in the case of former AWB Limited board chairman Trevor Flugge
, hearing loss.
On 6 February 2006 the inquiry's terms of reference were extended to include the activities of companies in the BHP Billiton Group
and associated companies in relation to the Oil for Food Program.
On 16 February 2006 Commissioner Cole invited broadcast media into the inquiry's hearing room to record an invitation to anyone with information about kickbacks or the Iraqi oil-for-food scandal to appear before his inquiry. Cole emphasised that this appeal applied to anyone saying: "I am extending a specific invitation to any Member of Parliament, any member of the media, any public servant, or any member of the public who believes that they have information relevant to this aspect of the inquiry to provide any such information to those assisting me". (http://www.abc.net.au/reslib/200602/r73084_203985.asx Broad Band Video Clip from ABC TV)
On 2 March 2006 counsel assisting, John Agius, threatened to serve search warrants on AWB Limited following claims of memory lapses and loss of documents by a former company manager, Andrew McConville. This was countered by counsel for AWB Limited who suggested that the search for documents by the company was being conducted in a rigorous manner and at considerable expense.
On 3 March 2006, Cole applied for the inquiry's terms of reference to be amended to extend the period of the inquiry for up to two months (i.e. from the end of March to May 2006). Prime Minister John Howard
indicated the government's agreement to this request two days later.
Prime Minister John Howard was asked to write and submit a statement in regard to this matter, and was "cross examined" on 13 April for 53 minutes. Howard previously stated to the Sydney Morning Herald "If asked I will naturally be happy to appear." "I've said all along that this is an utterly transparent process, which is not protecting the Government, which is designed to get to the truth of this matter and I am more than happy to comply with the request made by the commission."
The AFP announced that the decision to drop the investigation was made after a review of the evidence by senior barrister Paul Hastings QC, who declared the prospect of convictions was limited and "not in the public interest".
In 2009, The Australian reported "It has hardly been a secret that the AFP investigation was under-funded and under-resourced, and it received little co-operation from AWB, which sees itself as a new entity, with all staff associated with the corrupt dealings having left."
Mr Hastings told the AFP that in his opinion there was no reasonable prospect of a conviction. It was not even clear that breaching a UN sanction is a criminal offence. Federal police drop AWB investigation
Royal Commission
In Commonwealth realms and other monarchies a Royal Commission is a major ad-hoc formal public inquiry into a defined issue. They have been held in various countries such as the United Kingdom, Australia, Canada, New Zealand, and Saudi Arabia...
set up by the Government of Australia
Government of Australia
The Commonwealth of Australia is a federal constitutional monarchy under a parliamentary democracy. The Commonwealth of Australia was formed in 1901 as a result of an agreement among six self-governing British colonies, which became the six states...
in November 2005. Its purpose was to investigate "whether decisions, actions, conduct or payments by Australian companies mentioned in the Volcker Inquiry
Paul Volcker Committee
The Paul Volcker Committee was formed to investigate alleged corruption and fraud in the United Nations Oil-for-Food Programme in Iraq....
into the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
Oil-for-Food Programme
Oil-for-Food Programme
The Oil-for-Food Programme , established by the United Nations in 1995 was established with the stated intent to allow Iraq to sell oil on the world market in exchange for food, medicine, and other humanitarian needs for ordinary Iraqi citizens without allowing Iraq to boost its military...
breached any Federal, State or Territory law." The Volcker Inquiry was set up to investigate the systematic corruption of the Oil for Food program by Saddam Hussein
Saddam Hussein
Saddam Hussein Abd al-Majid al-Tikriti was the fifth President of Iraq, serving in this capacity from 16 July 1979 until 9 April 2003...
.
The commission's five volume report was tabled in parliament
Parliament of Australia
The Parliament of Australia, also known as the Commonwealth Parliament or Federal Parliament, is the legislative branch of the government of Australia. It is bicameral, largely modelled in the Westminster tradition, but with some influences from the United States Congress...
on 27 November 2006
The Volcker Inquiry
The United NationsUnited Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
Independent Inquiry Committee was formed to investigate allegations of corruption and fraud in the UN Oil-for-Food Programme. Paul Volcker's report, released in October 2005, found that AWB was the biggest single source of kickbacks made to the Iraqi government. In exchange for trouble-free disembarkation of wheat purchased under the Oil for food program, AWB paid 'trucking charges' totaling A$300 million to Alia, a Jordan
Jordan
Jordan , officially the Hashemite Kingdom of Jordan , Al-Mamlaka al-Urduniyya al-Hashemiyya) is a kingdom on the East Bank of the River Jordan. The country borders Saudi Arabia to the east and south-east, Iraq to the north-east, Syria to the north and the West Bank and Israel to the west, sharing...
ian trucking company. Volcker found that Alia kept a small percentage of the 'charges', and passed the remainder to the government of Saddam Hussein
Saddam Hussein
Saddam Hussein Abd al-Majid al-Tikriti was the fifth President of Iraq, serving in this capacity from 16 July 1979 until 9 April 2003...
.
An accompanying statement released with the report by the Secretary-General of the United Nations, Kofi Annan
Kofi Annan
Kofi Atta Annan is a Ghanaian diplomat who served as the seventh Secretary-General of the UN from 1 January 1997 to 31 December 2006...
requested that “national authorities take steps to prevent the recurrence of such practices in the future and that they take action, where appropriate, against companies falling within their jurisdiction.” http://www.ag.gov.au/agd/www/UNoilforfoodinquiry.nsf
Establishment of the Cole Inquiry
In response to Volcker's findings, the Australian Government established a Royal Commission to further investigate the claims raised by the UN report. By Letters PatentLetters patent
Letters patent are a type of legal instrument in the form of a published written order issued by a monarch or president, generally granting an office, right, monopoly, title, or status to a person or corporation...
issued on 10 November 2005 the commission was asked to inquire into and report on:
(a) whether any decision, action, conduct, payment or writing of any of the three Australian companies mentioned in the Final Report (“Manipulation of the Oil-for-Food Programme by the Iraqi Regime”) of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme, or any person associated with one of those companies, might have constituted a breach of any law of the Commonwealth, a State or Territory; and
(b) if so, whether the question of criminal or other legal proceedings should be referred to the relevant Commonwealth, State or Territory agency. http://www.ag.gov.au/agd/WWW/UNOilForFoodInquiry.nsf/Page/Terms_of_Reference
Commissioner and Counsel
The Royal Commissioner was the Honourable Terence ColeTerence Cole
Terence Rhoderick Hudson Cole, AO, RFD, QC , is an Australian jurist, known best for presiding over two Royal Commissions. Cole was born in Longreach, Queensland, and was educated at Fort Street High School in Sydney and the University of Sydney. He was admitted to the bar in 1962, and appointed a...
QC
Queen's Counsel
Queen's Counsel , known as King's Counsel during the reign of a male sovereign, are lawyers appointed by letters patent to be one of Her [or His] Majesty's Counsel learned in the law...
a former Judge of Appeal of the New South Wales Supreme Court. The Cole Inquiry was the second Royal Commission
Royal Commission
In Commonwealth realms and other monarchies a Royal Commission is a major ad-hoc formal public inquiry into a defined issue. They have been held in various countries such as the United Kingdom, Australia, Canada, New Zealand, and Saudi Arabia...
Cole had headed. The 2001-2003 Royal Commission is commonly referred to as the "Cole Royal Commission" hence to avoid confusion the 2005-06 Royal Commission is commonly referred to as the "Cole Inquiry".
Cole was supported by John Agius SC
Senior Counsel
The title of Senior Counsel or State Counsel is given to a senior barrister or advocate in some countries, typically equivalent to the title "Queen's Counsel" used in Commonwealth Realms...
, Counsel Assisting and three other barristers, Gregory Nell, Michael Wigney and Miles Condon.
The three Australian companies adversely mentioned in the UN report (AWB Limited
AWB Limited
AWB Limited is a major grain marketing organisation based in Australia. It was a government body known as the Australian Wheat Board until 1 July 1999, when the AWB was transformed into a private company, owned by wheat growers...
, Alkaloids of Australia Pty Limited, and Rhine Ruhr Pty Ltd) were granted leave to be represented by counsel before the Royal Commission
Hearings
Prior to the public hearings the commission held a series of closed hearings in December 2005 and January 2006. Some witnesses who were examined in the closed hearings also gave evidence in the public hearings.The commission's public hearings commenced on 16 January 2006. During the first six weeks of public hearings evidence led by Agius and cross examination by him of witnesses brought out a series of revelations that showed the conduct of AWB Limited
AWB Limited
AWB Limited is a major grain marketing organisation based in Australia. It was a government body known as the Australian Wheat Board until 1 July 1999, when the AWB was transformed into a private company, owned by wheat growers...
's executives and directors in a very poor light. Apart from interrupting assisting counsel's question to ask witnesses his own probing questions, Cole frequently made reproving comments about the behaviour and evidence of witnesses particularly those in responsible and often highly remunerative positions with AWB Limited and the Wheat Export Authority
Wheat Export Authority
The Export Wheat Commission was a statutory authority of the Australian government. The EWC was established on 1 October 2007 and superseded the Wheat Export Authority...
, who among other things frequently claimed memory loss, inability to locate diaries and notes and notoriously, in the case of former AWB Limited board chairman Trevor Flugge
Trevor Flugge
Trevor James Flugge, born 1 February 1947, is an Australian farmer and businessman.He is best known as an official of the Australian Wheat Board...
, hearing loss.
On 6 February 2006 the inquiry's terms of reference were extended to include the activities of companies in the BHP Billiton Group
BHP Billiton
BHP Billiton is a global mining, oil and gas company headquartered in Melbourne, Australia and with a major management office in London, United Kingdom...
and associated companies in relation to the Oil for Food Program.
On 16 February 2006 Commissioner Cole invited broadcast media into the inquiry's hearing room to record an invitation to anyone with information about kickbacks or the Iraqi oil-for-food scandal to appear before his inquiry. Cole emphasised that this appeal applied to anyone saying: "I am extending a specific invitation to any Member of Parliament, any member of the media, any public servant, or any member of the public who believes that they have information relevant to this aspect of the inquiry to provide any such information to those assisting me". (http://www.abc.net.au/reslib/200602/r73084_203985.asx Broad Band Video Clip from ABC TV)
On 2 March 2006 counsel assisting, John Agius, threatened to serve search warrants on AWB Limited following claims of memory lapses and loss of documents by a former company manager, Andrew McConville. This was countered by counsel for AWB Limited who suggested that the search for documents by the company was being conducted in a rigorous manner and at considerable expense.
On 3 March 2006, Cole applied for the inquiry's terms of reference to be amended to extend the period of the inquiry for up to two months (i.e. from the end of March to May 2006). Prime Minister John Howard
John Howard
John Winston Howard AC, SSI, was the 25th Prime Minister of Australia, from 11 March 1996 to 3 December 2007. He was the second-longest serving Australian Prime Minister after Sir Robert Menzies....
indicated the government's agreement to this request two days later.
Prime Minister John Howard was asked to write and submit a statement in regard to this matter, and was "cross examined" on 13 April for 53 minutes. Howard previously stated to the Sydney Morning Herald "If asked I will naturally be happy to appear." "I've said all along that this is an utterly transparent process, which is not protecting the Government, which is designed to get to the truth of this matter and I am more than happy to comply with the request made by the commission."
Outcome
The Australian Federal police on 28 August 2009 decided to drop its investigation into the scandal, in which wheat exporter AWB was found to have been funding the Iraqi regime in breach of UN sanctions. It was found that it was not even clear that breaching a UN sanction is a criminal offence and a conviction "was not in the public interest". The decision means no former employee or director of AWB will face criminal charges, although an investigation by corporate watchdog ASIC continues.The AFP announced that the decision to drop the investigation was made after a review of the evidence by senior barrister Paul Hastings QC, who declared the prospect of convictions was limited and "not in the public interest".
In 2009, The Australian reported "It has hardly been a secret that the AFP investigation was under-funded and under-resourced, and it received little co-operation from AWB, which sees itself as a new entity, with all staff associated with the corrupt dealings having left."
Mr Hastings told the AFP that in his opinion there was no reasonable prospect of a conviction. It was not even clear that breaching a UN sanction is a criminal offence. Federal police drop AWB investigation
External links
- Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme - inquiry's website
- The commission's report
- Wheat Export Authority
- Royal Commissions Act 1902
- Independent Inquiry Committee into the Oil for Food Programme - Volker Inquiry website
Commentary
- "More than a cuckold" - commentary by Caroline Overington in The Weekend Australian - 4 March 2006
- "This inquiry is only half the job" - commentary by barrister Richard Ackland in Sydney Morning Herald 14 April 2006
- "Deceit by the truckload" - in depth report on the Cole Inquiry and the evidence before it by David MarrDavid Marr (journalist)David Ewan Marr is an Australian journalist, author, and progressive political and social commentator. His areas of expertise include the law, Australian politics, censorship, the media and the arts...
and Marian WilkinsonMarian WilkinsonMarian Wilkinson is an Australian journalist and author. She was born in 1954 and grew up in Brisbane, Queensland where she attended the University of Queensland. She is the environment editor for The Sydney Morning Herald...
in Sydney Morning Herald 14 April 2006 (Part 2) - "Cash Crop Part One" - Four Corners Program 10 April 2006
- "Cash Crop Part Two" - Four Corners Program 17 April 2006
- "David Flint" - Opinion on the call to widen the Cole Inquiries Terms of Reference
- "Rebecca Weisser" - Opinion on the systemic failure of Australian Department of Foreign Affairs and Trade to prevent AWB's corrupt contracts.