Bob McMullan (Fraser, Australian Labor Party) Share this | Hansard source

I rise more in sorrow than in anger to speak in this debate. As a former minister for the Department of Foreign Affairs and Trade, I have very high regard for many of the officials in that department. They were put in a terrible position as a result of the circumstances that developed. In my role as the Minister for Trade I dealt with the Australian Wheat Board—it was differently constituted then but nevertheless I dealt with the Australian Wheat Board as it then was—and I was aware of the great significance it placed on the wheat trade to Iraq.

I want to add to some extent my agreement with some of the remarks made by the member for Corangamite—I have to say not much of them but one part—insofar as I am particularly concerned when the law gives a monopoly in any event but particularly to a privatised monopoly. Any monopoly has serious risks because of the capacity to generate anti-competitive conduct and to distort proper market operations. But when you privatise a monopoly, you create really perverse incentives. It is equally true when you privatise a dominant player in an important market. I would be straying too far to say more than that is one of the reasons why I think the government’s decision to privatise Telstra is such a mistake. But I do want to put on the record my reservations about the continuation of AWB’s monopoly powers. That is a matter for consideration on another occasion and there are many factors to be considered and those reservations may be outweighed by other factors—but I certainly do have some concern.

But when I became aware, as I said in opening, of the AWB and the significance it gave to its wheat trade to Iraq in the nineties, I also became aware of the rigour with which the then foreign minister, Gareth Evans, applied the United Nations sanctions, enforced them and imposed them on AWB and on BHP—in BHP’s case, through Tigris, who were endeavouring to get around the sanctions in one way or another. There could have been no doubt in both AWB and BHP that the foreign minister was actively, in detail and in a very forthright manner, requiring them to comply with the UN sanctions. They were not exactly the oil for food sanctions, because it was at a slightly earlier stage in the United Nations relationship with Iraq, but there were UN imposed sanctions with which Australia was required to comply. There were export control regulations which it was the responsibility of the foreign minister to ensure that Australian companies complied with—and Gareth Evans made sure they did. I have seen the files; I have seen the notes. I am aware of the instructions that he gave to both BHP and AWB to make sure that they complied. That is why I think it is such a travesty that people can say the foreign minister has been exonerated.

What has been found is that he did not break the law and he was ignorant of what was going on around him. That is no real excuse for a minister. First and foremost, he did not make sure that the responsibilities imposed upon him by the export control regulations were properly carried out. If the government did not have any concern about that, if the government had nothing to hide, why would they not give the commission the power to judge the merits, the competence and the appropriateness of the performance of ministers? But that was explicitly excluded. That was not a matter upon which the commissioner could rule. Why? Because the government knew the answer before they started. At least one minister was lacking—on the basis of his performance before the commission—and I would say two, because the then Minister for Trade’s performance was an embarrassment to all of us as public representatives and, for anyone who had previously been the Minister for Trade, we were almost humiliated to see how incompetent he claimed to be in his defence.

But the primary responsibility lies with the Minister for Foreign Affairs. Forty-one contracts were approved despite 35 warnings. Of course, a warning is not a conviction. It does not say to you, ‘This company has done the wrong thing.’ It says, ‘This is a matter you should look at.’ I recall the foreign minister coming into the House of Representatives and saying, ‘I could not investigate this matter without the assistance of the AFP with a warrant because I had no right to seek the documents.’ That is just untrue. Under the export control regulations, when the minister has to give approval he can say, ‘I will not give approval until you show me the documents that prove you are complying with the sanctions.’ That is what the minister is given the power for. It is not because it is a bit of fun to sign documents and we all feel better if we do it. The minister delegated that responsibility anyway, which he was entitled to do. The power exists so that the minister has the capacity to enforce the sanctions. He explicitly had those powers; he totally failed to take action.

We have a circumstance where there were allegations, but beyond that there was a cable that came to the minister’s office which raised this allegation. Once again, it was not proof. I would not expect him to take action against the AWB on that allegation, but I expect him to investigate. As far as I can tell, the minister still holds that he did not read that cable. I ask anybody to contemplate whether a cable of that character coming into Gareth Evans’s office would not have been read by him, would not have been subject to a minute from him and would not have had a response from him.

Let us assume that it is reasonable for a minister not to be aware of a profoundly important cable from the Australian mission at the UN alleging breach of sanctions by a major Australian company. For some reason, people seem to think it is all right for the minister not to have read that. I think it is an absurd proposition and a failure of great magnitude on his part. But let us assume that it is okay. As I understand it, the report was read by others in his office. Here we face a serious problem of a black hole of accountability in the Australian accountability regime.

There is a longstanding principle which I have articulated—in fact, to my embarrassment, I saw it reported in one place as the ‘McMullan principle’—which says: ‘Staff are responsible to ministers. Ministers are responsible to the parliament.’ In the normal course, that is correct, but that means you have to accept responsibility for what your staff do. You cannot say: ‘They’re responsible to me but I do not care what they do; I am not going to tell you what they do. If they make a mistake, it is nobody’s business.’ Then there is a black hole of accountability because they deal with the departments. They give instructions; they receive directions. It was of course classically illustrated in ‘children overboard’, but it is illustrated here as well. There is a big black hole in Australian accountability, and either ministers have to accept responsibility for what their staff do or staff have to be accountable. It cannot be that nobody is accountable.

That is what we have at the moment, and therefore the foreign minister had the capacity to investigate and refused to do so. In fact, he got up in the parliament and said he did not have the capacity, when that is just untrue. Secondly, we had the cable to his office and nobody accountable for the failure to act upon it. Then we had a sin of commission. There were two major sins of omission, but the sin of commission was that he nobbled the proposal for a United States investigation because it might have been politically embarrassing, particularly as it was likely to arise just before the Australian election. He nobbled it on the basis of a guarantee that he gave, which he knew at the very least flew in the face of serious allegations and he knew that he had not investigated those allegations.

Without investigating these allegations, he gave a guarantee to the United States congress that there was nothing in them—a profound breach of his obligations. I have been in negotiations with the United States government. I have given them guarantees on behalf of Australia that certain things were true, but I made very sure that I had done everything to satisfy myself that the assurance I was giving was accurate. In most cases I sought cabinet approval to give it; sometimes I sought it on the basis of my own investigations.

There are two other things I want to refer to. One was covered by the shadow minister, the member for Wills. That is the very interesting reports about the next round of information about this, which is what will emerge from the dock when people are charged with offences arising from this, because people are saying—perhaps incorrectly; we do not know—that they will implicate the foreign minister in their evidence. But one thing we can be sure of is that this government will move heaven and earth to ensure that those cases do not come before the court until after the next election. I will guarantee that now. This government will do everything to prevent those matters coming to court until after the next election. If the government changes, there will be significant capacity to investigate these matters, and I look forward to that being done.

But the questions that go unanswered are these: what are ministers responsible for in this government? Of course they are responsible for what they do themselves, and of course they cannot be responsible for everything that every officer of their department does. But who is responsible for the fact, established by the Cole royal commission, that there was a lack of procedures to ensure that the UN sanctions were complied with? The minister cannot be responsible for what every officer writes on every file or every letter that goes out of the department, but you can be responsible for making sure that your legal responsibilities are properly carried out and that there are procedures in place to ensure that it happens. It is the minister’s job to make sure. They cannot do everything themselves, but they must establish a culture of compliance and a proper set of procedures.

Who is responsible? Who is going to be accountable for the failure to follow up 35 warnings? Is nobody in this government accountable for that? Is it the fact that people can come to a minister directly, as some did and as others sought to do, and say, ‘I believe this Australian company is in breach of the sanctions’? It was not just airy-fairy comment: the Canadian government raised it with the United States, who raised it with us. The Canadian government raised it in January 2000—and on what bit of information did they do it? Their wheat board had been approached for kickbacks. Their wheat board said no and told their government that the Iraqi government had said to the Canadians, ‘Well, you should do it; the Australians are.’ Did we hold an inquiry then? Not on your nelly!

We asked the AWB if it was true and they said no. It is like the congress asking the Watergate burglars whether they had broken into Democrat headquarters. It is as credible an investigation as ringing up Gordon Liddy and saying, ‘Gordon, did you break into Watergate?’ and, on being told no, saying: ‘Well, that’s it; I’ve inquired. No need for any more inquiry’—and Richard Nixon might still be the president.

The Australian government did nothing. So in June 2003 what was that other minor agency that raised an allegation? The Coalition Provisional Authority said: ‘All these contracts have a 10 per cent commission. We’re inquiring.’ Did we inquire? No; we asked AWB if they were paying a commission and—shock, horror—they said no. The Cole commission said, ‘Yes, they were.’ It is a terrible thing that AWB were doing it and it is a terrible thing that they lied, and it is proper that they be pursued on that basis. But, in this parliament, the obligation is on the ministers to make sure that proper procedures are in place, that the Australian law is complied with and that ministers act responsibly to discharge their obligation. The Cole royal commission did not find on that because the government would not let it, but this parliament should not rest until it makes sure somebody is accountable for those failures.

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