Cole Inquiry AWB hearings conclude
The "Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme" concluded public hearings on 29 September 2006. Hearings commenced on 16 January. Its report is due on 24 November.
Although there were 3 other companies investigated, the Inquiry primarily focussed on the conduct of AWB in relation to its wheat sales to Iraq.
The last week provided evidence of conduct worse than I foreshadowed in my post of 31 January: AWB's corporate reputation is in tatters. It has had to replace its Chair and CEO and other senior executives. The documents show a failure of culture, systems and procedures: a willingness to break international conventions, to pay bribes and then to cover up their activities.
Counsel assisting argues that there was "a policy of doing whatever it took to get the business done."
Commissions of Inquiry always look for "the smoking gun", that piece of evidence that plainly exposes the truth of what happened, but rarely find it. Commissioner Cole, in his last week, has finally obtained documents which contradict the denials of AWB witnesses.
At least one email discovered (relating to the building of bunkers by the Iraqis) has prompted the Commission to indicate that it is examining whether AWB and others might have committed an offence under the terrorism offences in the Criminal Code.
This exchange between the Commissioner and the former CEO on the last day is revealing:
THE COMMISSIONER: Q. Mr Lindberg, it does appear that large amounts of money did go from AWB to Iraq through Alia, and you've said to me that it happened and it shouldn't have happened. It's obviously been a disaster for AWB and, no doubt, for you personally. Are you able to give me any understanding as to how you think this came about, how it happened in a company like AWB?
A. I haven't followed all the evidence in this Commission, Commissioner, but it would appear that it was set up before I arrived by former employees and it continued under my stewardship, and it shouldn't have.
In the final analysis much will also be said about subsidiary issues: the function of in-house lawyers and the tension between commercial loyalty to their employer and professional ethics, the role of lawyers in internal investigations and the use of legal professional privilege to restrict access to incriminating documents, internal document management and systems for retrieving documents and emails and the appropriate corporate position to take when an investigation is launched.
Ultimately this inquiry will be about corporate culture and the harm that can be caused by a failure of board and management to show leadership.
Commissioner Cole will produce a report containing factual findings and recommendations about what legal offences may have been committed. Most likely it will become a valuable tool for training and case studies.
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