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AWB scandal - a failure of governance

Speeches in Parliament
Rachel Siewert 27 Nov 2006

The government claims that this is not a political scandal and that there was no illegal activity. Mr Cole was not asked to find illegal activity.
In the report Mr Cole stated:

It is not my function to make findings of breach of the law; my function is to indicate circumstances where it might be appropriate for authorities to consider... criminal or civil proceedings...

It is quite clear that many of the areas that should have been looked at in this inquiry were not able to be looked at because of the limited terms of reference. I agree with Senator Murray: there are a number of concerning areas apparent just from the very quick look at the report that we have had time for. I am greatly concerned about a number of the findings.

For a start, let us look at the incompetence in the oversight of the WEA, the Wheat Export Authority. The Cole report shows that, quite clearly, the WEA was not carrying out its functions. Paragraph 29.60 of volume 4 of the report states:

In relation to exports to Iraq, the Wheat Export Authority did not display the necessary strength or vigour.

Mr Cole, in the report, goes on to recommend:

... there be a review of the powers, functions and responsibilities of the body charged with controlling and monitoring any Australian monopoly wheat explorer. A strong and vigorous monitor is required to ensure that proper standards of commercial conduct are adhered to.

The WEA very clearly reported to the Minister for Agriculture, Fisheries and Forestry. Why were these issues not picked up? Just by asking questions at estimates, it was indicated very clearly that the WEA has a very narrow interpretation of its terms of reference and of its functions and that it was not carrying out its functions of oversight of the AWB adequately.

In looking at the whole of the issue around the AusAID payment for wheat, in the report I can find reference to the contracts, but I cannot find any direct comment about AusAID and the way that that contract was established and a decision was made on it. That is exactly the sort of thing that the Cole inquiry could not adequately look into, because it looked at the government's role and at the agency's roles in decision making and at its failure to carry out what I believe are statutory requirements and an adequate review of the $83 million that was paid out to buy wheat. Of that $83 million, $38 million went to shipping and $45 million went to trucking-54 per cent of the money went into handling and distribution costs.

When a decision is made about the allocation of money to AusAID, there is a very rigorous process that is undertaken for allocation of that money. There are very strict requirements under the financial management legislation, and delegates must take all reasonable steps to ensure expenditure of public money provides value for money, aligns with the public interest and provides an assurance of probity. I understand that the minister takes an interest in and does not use a delegate for anything over a certain amount of money spent by DFAT on AusAID-I understand it is over $1 million. So DFAT was not carrying out its job properly. It did not carry out scrutiny of the contracts, so there was a failure in process, a failure to report to the government. In one way or another, there was a failure by the government to adequately oversee the functions of its agencies, both the WEA and AusAID.

From the less than an hour that we have had to review the report, I feel sure that the report is full of similar stories of government failure to properly carry out governance of the many boards that were involved in the decision making process. There clearly needs to be a thorough review of how agencies operated through this whole sorry saga-not just from a legal perspective, as was the undertaking of Mr Cole, but from those of their governance, their decision making processes and their oversight of these programs. Quite clearly, ministers have been failing in their duties in respect of these agencies.

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