Thursday, 16 August 2007
International Trade Integrity Bill 2007
Debate resumed from 14 June, on motion by Mr Ruddock:
That this bill be now read a second time.
The International Trade Integrity Bill 2007 will finally see the government doing something to shut the stable door that was left wide open while AWB officials were shovelling money into Saddam Hussein’s coffers. The bill is the government’s response to the wheat for weapons scandal—the payments, allowed through the government’s negligence, made by the Wheat Board to Saddam Hussein. It is the greatest corruption scandal in Australia’s history. The Cole inquiry which was set up to investigate this scandal was a flawed and limited inquiry. It revealed that these payments took place and that the Howard government and its ministers did nothing to stop them. The best construction that can be put on the whole sordid wheat for weapons affair is that the government was ignorant, incompetent and negligent—hardly the mob you would want to be running this country.
When I said that the inquiry itself was flawed, it was not to criticise the commissioner himself. Commissioner Cole did a thorough job, but he was constrained by the terms of reference which were specifically designed by the government to deflect blame away from the Prime Minister, the Minister for Foreign Affairs, the Minister for Trade and the Minister for Agriculture, Fisheries and Forestry. Commissioner Cole found that the Prime Minister and other senior ministers were warned at least 35 times that these matters should be investigated but, instead of following up on those warnings and investigating the serious allegations, what did these highly paid ministers do? They did nothing—absolutely nothing. It was sheer incompetence. So concerned were they about the serious allegations—all 35 of them—that they ignored them. It is negligence in the extreme. Indeed, the defence put forward by these dozy ministers was that they couldn’t recall, they hadn’t read the cables or that the warnings came to their offices but were not passed on by their minders. It is unbelievable. I do not think there is anyone in Australia who believes those defences. These denials amount in essence to a plea of guilty to the charge of negligence because the only other course would have been to admit that the government had detailed knowledge of the whole corrupt affair but did nothing about it.
The failure of the Howard government to respond to the 35 warnings has seriously damaged Australia’s international reputation and has left Australian wheat growers with only very limited access to the once lucrative Iraqi wheat market. The illegal payments by the Australian Wheat Board were bribes to a regime so bad, we are told, that it had to be invaded and destroyed. Day after day the Prime Minister came into this place and trumpeted his reasons for invading Iraq, yet time and time again he, his ministers and their advisers ignored allegations that a major Australian company was topping up Saddam Hussein’s war chest to the tune of $300 million. No wonder it has been called the ‘wheat for weapons scandal’.
The Cole inquiry, as I said before, was flawed and limited in that it was not asked to examine the role of ministers in the discharge of their duties. In particular, the commissioner was not able to determine why the foreign minister did not enforce the UN sanctions against Iraq. In a sense, this bill belatedly responds to the questions that could not be asked by the Cole inquiry. The bill is welcome; it does strengthen Australia’s capacity to enforce UN sanctions and to combat foreign bribery. It is just a pity that the government only took this action following a great national scandal. Despite repeated warnings, the foreign minister and trade minister failed to take any action to prevent an Australian company making illegal payments to a foreign government. What is more, it was a foreign government which Australia then, in company with other governments, in particular the US, attacked and invaded on the pretext that it had weapons of mass destruction—weapons never found and weapons which in fact did not exist. It was a nation which was invaded on the false premise that Saddam Hussein was allied to al-Qaeda. We sent our soldiers to war against an enemy that we partly funded. What sort of incompetence is that?
Labor have always supported those brave men and women who were sent on government orders. We have full admiration for their courage and professionalism. We in the Labor Party opposed the Howard government decision to send them. Our argument is with the government of the day, not the troops that went over. What this government did through its negligence was to allow the funding of a regime that our troops were sent to overthrow. This war is Australia’s greatest military and foreign policy disaster since Vietnam. It is a military morass in which we are now trapped—trapped with the United States with no plan for peace and no exit strategy. History, unfortunately, does repeat itself. This indeed is the Vietnam of the desert. The Australian Wheat Board scandal—the deceit and duplicity that characterised that sorry saga—is itself symptomatic of the wider tragedy of that Iraq war.
The Attorney-General, in introducing this bill, had the absolute effrontery to say that this bill:
... continues Australia’s tough stance against foreign bribery and contravention of United Nations sanctions.
What hypocrisy. What sheer cant. It is as though, in the Attorney-General’s mind, the Australian Wheat Board scandal had never occurred, as though an Australian company had not paid a foreign government in excess of $300 million in contravention of those very UN sanctions. If that is the case, why is this bill necessary? The Attorney-General went on to say:
Australia is a significant player in international trade. We have a reputation as a corruption-free trading partner, and an important participant in enforcing UN sanctions ...
As the spokesperson for trade on this side of the House, I can say that I have been enormously impressed by the quality, commitment and honesty of Australian exporters. But the Attorney-General needs to know that our hard-earned reputation for that honesty, for that integrity, in international trade has taken a huge hit through the actions of the Wheat Board. The fact that, through its demonstrated ignorance, its incompetence and its negligence, the Howard government allowed the Wheat Board’s dishonesty to occur unchecked and unpunished has seriously damaged our international reputation as honest traders.
As well as the damage to our international reputation, the behaviour of the Wheat Board and the negligence and incompetence of the Howard government have cost our wheat farmers and have cost our economy, and cost them very dearly. The present Leader of the Opposition, who was our former shadow trade minister, identified in the prosecution of this saga 25 separate warnings received by the government about the activities of the Wheat Board, even before the Prime Minister sent Australian troops to Iraq. These included warnings like the cable from Australia’s United Nations mission raising concerns about an allegation that the Wheat Board was paying $14 a tonne into a Jordanian bank account owned by a son of Saddam Hussein. That was a cable sent on 13 January 2000. That same mission again cabled, reporting on Iraqi demands for kickbacks and illegal commissions on humanitarian supplies. That cable, by the way, went to the Prime Minister, the foreign minister and the trade minister, all on 9 March 2001. The foreign minister, when questioned about this in the Cole inquiry, said that he could not recall reading it. You would think that something like that would stand out. It reported on demands for kickbacks, the very things that were outlawed through the United Nations sanctions.
We on this side of the House welcome the bill. We hope that the amendments will be effective in curbing the type of dishonest and corrupt conduct that occurred during the wheat for weapons scandal. That said, the truth remains that no amendments and no legislation will be effective without the will to enforce them. It is all very well to get up on a soapbox and announce legislation giving departments and agencies powers to demand information and providing for new penalties for noncompliance. That is the easy bit. But this lazy, tired and stale government has not demonstrated through its term of office the will or the strength to confront the problem and to take the hard decisions. The hard part, of course, is the follow-up to the legislation and the commitment to enforcing it.
The bill contains information gathering and handling provisions to improve the ability of agencies to administer the UN sanctions. It also introduces new offences for individuals or companies which provide false or misleading information in connection with the UN sanctions regime, which import or export goods prohibited by UN sanctions and which otherwise act in contravention of a Commonwealth law that enforces a UN sanction in Australia. We welcome these provisions, provided they are enforced and provided the Howard government does not fall asleep again. They will help restore Australia’s reputation as an honest and reliable exporter.
Even a cursory glance at the government’s sorry record during the wheat for weapons scandal will reveal a government unwilling or unable to use the considerable powers that it already had to demand information of the Wheat Board. As the former Minister for Primary Industries and Energy, I am well aware that the Wheat Marketing Act already provided the government with all the power it needed to demand documentation and other evidence of the Wheat Board’s illegal support for Saddam Hussein.
The approach of the current government stands in stark contrast to the approach which was taken by Labor when it was in office. In those days, Labor had to oversee the activities of the Australian Wheat Board in similar circumstances. During the first Iraq war, when sanctions were imposed on the regime by the United Nations, Labor saw to it that there was no rorting of this requirement under its watch. The then foreign minister, Gareth Evans, insisted that his department satisfy itself that the sanctions were not breached by Australian companies. During the Gulf War, there were no bribes paid.
Labor also managed to ensure that Australian wheat interests were protected. As the minister for primary industries, I announced ex gratia payments to grain growers who would have lost out because of the rigorous application of the sanctions. Labor did the right thing. That is the point: Labor ministers fulfilled their responsibilities. They did not display negligence, they did not go to sleep at the wheel, they did read the cables and they did pursue rigour in ensuring the implementation of sanctions, the imposition of which they had been party to insisting on. Labor protected the integrity of the UN sanctions, at the same time looking after the interests of grain growers. That is what effective ministers do—that is what they are paid to do; that is what they are elected to do—but not the sorry lot on that side of the House, on that occasion. We have to fulfil our international responsibilities and, if there is an impact on a section of Australian industries, seek to ease the burden.
What a contrast we have between the way Labor governed in the context of this situation and the way the government has so badly handled the situation this time around. The ministers in the Howard government failed to fulfil their responsibilities to the international community, and they must bear a very large part of the blame for the loss of major wheat markets and a tarnishing of the Wheat Board brand in the international marketplace. All we can hope is that the government will use the new powers provided under this legislation more effectively than it used the similar powers it already possessed under the Wheat Marketing Act.
The government has also provided funds for the Department of Foreign Affairs and Trade to coordinate implementation of United Nations and bilateral sanction regimes and to monitor and ensure compliance with the sanctions. It could be argued that this is what DFAT should have been doing anyway; nevertheless it is a positive move.
The bill has been the subject of scrutiny by the Senate Standing Committee on Legal and Constitutional Affairs. That committee invited submissions and held a public hearing. The committee examined the bill in detail, analysed some differing views put to it, set out what it saw as the key issues and reported in August—this month. The committee considered that the bill would strengthen the implementation and enforcement of the United Nations sanction regimes in Australia and recommended that the bill be passed.
We welcome the government’s commitment to promoting a culture of ethical dealing in connection with the United Nations sanctions and international trade. The Attorney-General is right to say that legislation alone is insufficient and that Australian businesses have the responsibility of maintaining a reputation for ethical dealing and integrity.
The commencement arrangements for the bill—on a date to be fixed by proclamation, or six months after royal assent—allow for consultation with businesses and industry stakeholders about the amendments and their implementation. The government is to run a general public information campaign and will also focus specifically on import and export businesses.
I want to make two points with regard to this. Whilst we welcome the process as a positive way of ensuring that businesses appreciate the moral and legal necessity to trade honestly and ethically, we would like to hear from the Attorney-General, when he sums up, some details about how this consultation and education process will be undertaken.
Secondly, regarding the campaign to inform the public of the changes, foreshadowed by the Attorney-General in his second reading speech, I am very suspicious of any public information campaign run by this government—and well we should be. One has only to look at the most recent manifestation, the Barbara Bennett Work Choices advertisements, to see how public information campaigns for this government become blatant political advertising. ‘Know where you stand,’ indeed! I would hope that any public information campaign would not be simply an exercise in exonerating the government from any blame or responsibility in the Wheat Board wheat for weapons affair.
Some unfinished business will remain after this bill is passed. The 2006 OECD report on bribery of foreign officials raised concerns about Australia’s lack of monitoring of foreign bribery. The report also recommended a review of whistleblower provisions so that Commonwealth officials can report suspicions of foreign bribery without fear of retaliation.
The lesson of the Australian Wheat Board wheat for weapons scandal is clear. There needs to be substantial reform to protect and strengthen the integrity of Australia’s public and private sectors. In the case of the Wheat Board scandal, our honest and hardworking wheat growers deserve it. All of our exporters, working hard to establish themselves in tough and competitive foreign markets, need it to be known that Australians are fair and honest traders. I move:
That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House:
- notes that it has been 18 months since the OECD Working Group on Foreign Bribery in International Business Transactions released its Phase 2 Report on Australia and nine months since the Cole Inquiry, and yet we are only now seeing this legislation pass through Parliament;
- notes that this lax approach to Australia’s obligations on bribery of foreign officials is unsurprising, given that the government—either through complicity or incompetence—allowed AWB to funnel $350million to the former Iraqi Dictator, Saddam Hussein;
- condemns the government for failing to take action on the scandal despite the repeated communications made to senior public servants, Ministerial offices and Ministers themselves;
- condemns the government for its failure to bring forward the full range of measures needed to bring Australia into compliance with our international obligations on bribery—which includes a failure to bring forward proper legislative protections for whistleblowers;
- notes that other key statutory instruments of Australia’s fight against money-laundering and terrorist financing were delayed for years, with many still yet to be brought before Parliament; and
- condemns the government for its abject failure to uphold Australia’s international reputation on these issues of importance”.
The original question was that this bill be now read a second time. To this the honourable member for Hotham has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.
I am pleased to support the International Trade Integrity Bill 2007. I believe it is a significant piece of legislation. It is about Australia’s trade integrity and reputation overseas, and it is important that we see this House support it. Certainly we have had much focus in this House on the events that occurred a few years ago in relation to the breaching of UN requirements, and I am very pleased to see that the Attorney-General has brought forward legislation which addresses this issue.
I heard the shadow minister for trade say that the events related to the AWB have seriously damaged Australia’s reputation. As the leader of a trade delegation that recently visited Mexico, I think that is a little short of the case. In fact, the International Relations Committee, which is a bipartisan independent group, presented us with research when we visited that country. They had surveyed the attitudes of Mexicans to 25 countries around the world, and Australia was in the top three in terms of its reputation. So much for damage to our reputation. In fact, it remains strong. It is unfortunate that those events occurred—there is no doubt of that—and the AWB has paid a high price. The responsibility of the officials from that organisation is clearly questioned.
During the long debates that related to this whole incident, the opposition were looking for the silver bullet that would link ministers to these events. Of course, despite their efforts in this House, it was never established. It was never established because it never occurred. The Cole inquiry that was established found that there was no evidence of ministerial involvement in any of these breaches. We need to put to rest all of the allegations that have occurred in this House, including the shadow minister’s imputation about the conduct of the ministers in relation to these events.
When 2,000 companies from 66 countries were named in the Volcker report, only two countries set up further independent inquiries and one of them was Australia. This government moved quickly to establish the Cole commission—an independent, open inquiry, which had all the powers of a royal commission. There is something the majority of countries named could have pursued, and that is simply to do nothing, but we set up a totally independent body that was able to find what they could and make recommendations. This legislation implements the findings of the Cole royal commission. I believe it was a very good inquiry in the way it was conducted. There was the independence of the commissioner, and the recommendations that were produced were in line with the general views in the community. During that whole time, the Labor Party attempted to blame the government and questioned the integrity of ministers, but, at the end of the day, there was really no substance to what was being alleged.
This government is extremely serious about maintaining Australia’s trade integrity and ensuring that businesses understand the laws of trade with UN-sanctioned regimes. My former role, well before coming to this House, was as a trade commissioner. The focus of those involved in trade activities is to get the orders. They would regard the niceties of what they need to do and, as part of the general background of events, what needs to occur. If they are involved in breaking UN sanctions, then we want to know about it. We do not care whether it relates to increasing our balance of payments or whether they are likely to get a big order or a bonus. In terms of this legislation, we say, ‘If you breach these requirements, you will pay the penalty’—that is, both the companies and the individuals concerned.
This bill implements recommendations 1 to 3 in the report of the inquiry into certain Australian companies in relation to the UN oil for food program, which of course was the Cole inquiry, but it goes further. It relates not only to this particular issue but across the board in terms of UN trade activities where sanctions apply. Where the UN has decided to impose sanctions it is appropriate because there are significant human rights abuses or issues in the international scene which require the world body to implement sanctions which would indicate to that particular regime: ‘The way you are conducting a business is inappropriate.’ How else can you achieve the kinds of outcomes that we would like to see?
The bill will make changes to foreign bribery offences and tax deductibility of payments to foreign officials. Overall, the bill will improve Australia’s ability to monitor and enforce UN sanctions and combat foreign bribery so that companies act within the guidelines and do not jeopardise Australia’s highly regarded trade reputation. Through this bill the government will continue to protect Australia’s highly regarded trading reputation. Because of the importance of international trade to Australia’s economy, it is important that we do all that we can to ensure the integrity of not only the government but all those who participate in international trade, particularly where there is UN involvement.
The bill introduces a new offence to the Charter of the United Nations Act 1945 for contravening a Commonwealth law that enforces UN sanctions, recommended by Commissioner Cole. It introduces separate criminal offences. Companies and their officers must certify the accuracy of information provided in connection with trading activities subject to UN sanctions—it is not enough to say: ‘Sorry, we’ve met our obligations. We put it in.’ It is up to them, according to this legislation, to certify the accuracy. What have they done to ensure that it is all as they have declared? False or misleading information will be grounds for invalidating any authorisation to conduct business under a UN sanctioned regime. Not only would they lose out in the business but criminal consequences can apply as well. Agencies that administer UN-sanctioned regimes in Australia will be granted an information-gathering power to investigate whether companies are complying with UN sanctions, so the resources will be there to carry out this information-gathering activity.
In terms of achieving that through the legislation provided, the Customs Act 1901 will introduce new offences for individuals or companies who import or export prohibited goods without proper authorisation. These offences carry identical penalties to the new offences in the Charter of the UN Act. The aim is to effectively deter organisations who may be considering contravening the sanctions. The applications for authorisation to import or export UN-sanctioned goods will be made on approved forms and, again, penalties will apply to false or misleading information.
There is the question of the bribery of foreign officials. It is an issue and a challenge for everyone operating in the international marketplace and particularly as it relates to particular countries. The bill amends the Criminal Code Act 1995 to clarify the circumstances in which a payment to a foreign public official is not a bribe. In future a payment to a foreign official will be allowed only if that payment is required or permitted in the law of the place or country that governs the foreign official. This will be so regardless of the outcome of the payment or whether it was purported to be necessary for any other reason. Every exporter is put on notice by this requirement. It is no longer enough to say: ‘That’s what they all did. If you wanted to get your goods through, that’s what you had to pay.’ It is saying it has to be required by law that this payment is necessary in order to trade. It makes it a clear criterion.
There is also a change to the Income Tax Assessment Act 1997 to provide that an amount paid to a foreign public official is not a bribe only in circumstances where it was required or permitted by the written law that governs the foreign public official. The failure to obtain the advantage sought by the bribe will not be relevant to determining whether a benefit paid is a bribe to a foreign official. That also closes any loophole that exporters may be trying to use.
The definition of ‘facilitation payment’ in the Income Tax Assessment Act 1997 will also be aligned with the definition in the Criminal Code Act 1995. Facilitation payments are tax deductible and are not a bribe to a foreign public official. This will clarify the current law by ensuring that a benefit paid to a foreign public official will be considered a facilitation payment only if it is minor in value and for the sole or dominant purpose of securing a routine government action of a minor nature. There is clarification under the law of what is regarded as a bribe and this must be complied with or penalties will apply. This is in line with the Cole recommendations. I am sure all members of the House would approve of and support this clarification.
In conclusion, it is clear the government has moved to continue to ensure that Australia’s international trade reputation remains strong, that our integrity is not impugned and that we are seen as being a first-rate country in terms of trading integrity. We have made the changes to the tax act, the Customs Act and the Criminal Code Act 1995. This will ensure that we define ‘bribery’, clarify the penalties imposed when UN sanction requirements are not complied with, clarify the legal written requirements of applications, clarify the responsibility of companies and individuals to check all the facts so that there are no breaches, and apply criminal sanctions for breaches. It is all on the table from here on in. Every exporter will know that, if they are involved in the UN sanction area, they have to comply or be subject to significant penalties.
It is important that we inform the public about these changes so that exporters will know. I heard a cynical comment by the shadow minister for trade. But the reality, having operated in this area and dealt with exporters, is that it is important that they all know about these changes. If you are going to introduce pretty harsh changes in responsibility and legal sanctions for noncompliance, it is appropriate that you very clearly let exporters know what is involved. There will be sufficient time for this consultation to take place with the businesses importing and exporting goods and services. Amendments will commence on a day to be fixed, by proclamation or six months after the bill receives royal assent. I am sure we would all agree with the time for consultation to ensure that information is out there so that people can comply. Legislation alone cannot accomplish this. It provides the necessary penalties, but it is up to every exporter to understand the spirit of the law. The spirit of the law is that we want all exporters to comply to ensure that Australia maintains a first-rate reputation for its trading integrity. I commend the bill to the House.
The International Trade Integrity Bill 2007 arises from the recommendations of the Cole commission in relation to the Australian Wheat Board and the UN oil for food program in Iraq. This bill exposes the government’s complete lack of credibility on this issue. When Labor raised the need to tighten these laws, the Treasurer and the Assistant Treasurer said that it was not necessary. In the arrogant manner we have come to expect, they said: ‘The opposition don’t know what they are talking about. The laws are fine.’ This bill now implements several of the things we were calling for a long time ago. This is a story we have come to expect. The Labor Party raises an issue and says it is in need of reform. The government comes in and says: ‘You don’t understand the issues. You don’t understand what you are talking about.’ It dismisses it with a great deal of arrogance and then quietly comes back 12 months or two years later and introduces the exact legislation that Labor was calling for.
The bill amends the Charter of the United Nations Act 1945, the Customs Act 1901, the Criminal Code Act 1995, and the Income Tax Assessment Act 1997. The bill seeks to improve and strengthen the enforcement of all UN sanctions and to combat foreign bribery. It contains information-gathering and handling provisions to improve agencies’ ability to administer UN sanctions. It introduces new offences for individuals or companies that provide false or misleading information in connection with a United Nations sanctions regime, import or export goods prohibited by UN sanctions or otherwise act in contravention of a Commonwealth law that enforces a UN sanction in Australia. It provides for amendments to the Income Tax Assessment Act, which I will turn to in a little while.
This bill is overdue and it follows the recommendations from the Cole inquiry, which itself was limited in its scope by the government. It is a necessary first step in combating international bribery. As the honourable member for Hotham said in his speech in the second reading debate, other issues have been identified by the OECD in their Australia: Phase 2 report on the application of the convention on combating bribery of foreign public officials in international business transactions and the 1997 recommendation on combating bribery in international business transactions. That raised a series of issues. For example, the phase 2 report highlighted the issue of there being no formal requirement for auditors to specifically look for instances of foreign bribery or report indications of foreign bribery. The OECD was unconvinced by the Australian Taxation Office’s view, and I quote:
... the payment of foreign bribes is not a significant occurrence in Australia. Accordingly the claiming of tax deductions for such payments has not been identified as a risk worthy of specific targeting in the ATO’s Compliance Program 2004-2005.”
Of course the AWB was paying $300 million, and claiming a $90 million or thereabouts tax deduction. So I agree with the OECD’s lack of reassurance that foreign bribery is not a priority for the ATO.
This bill amends a number of acts, as I said earlier. The amendments to the Charter of the United Nations Act 1945 create a new offence for individuals and corporations engaging in conduct that contravenes a UN sanction in force in Australia and provides for increased penalties for breaches. Furthermore, they introduce strict liability for corporations which engage in conduct that contravenes a UN sanction in force in Australia, including in relation to UN counterterrorism financing sanctions. The bill creates a new offence for people or corporations who knowingly or recklessly provide false or misleading information in connection with the administration of UN sanctions. Amendments to the Customs Act 1901 introduce new criminal offences for importing or exporting goods sanctioned by the United Nations without valid permission, and introduce a new criminal offence for providing information that is false or misleading in a material way, or omits particular material, in an application for permission to import or export UN-sanctioned goods.
I would like to particularly focus on the tax measures included in this bill. Provisions regarding the bribery of foreign officials are contained in amendments to the Criminal Code Act 1995 and the Income Tax Assessment Act 1997. The amendments to the Criminal Code Act 1995 clarify the circumstances in which a payment to a foreign official is not a bribe. In future, a payment to a foreign public official will only be allowed if it is required by the written law of the country or place that governs the foreign official, regardless of the outcome of the results of payment or the alleged necessity of a payment. No deduction is available for bribes paid to public officials in the course of running a business. A bribe is defined as an amount incurred in providing a benefit that is not legitimately due to another person where the amount is incurred with the intention of influencing a public official. In the case of bribes to public officials, two extra factors are considered in determining whether a payment is a bribe. A payment to a foreign public official is not a bribe (a) where the provision of the benefit does not contravene the law of the foreign country or (b) where it is a facilitation payment—a payment incurred for the sole or dominant purpose of securing the performance of a routine government action of a minor nature. This is important as it was an area of some controversy in relation to the Cole royal commission. Bribes to Saddam Hussein were regarded as not being a breach of Iraqi law because Saddam Hussein was of course a dictator and any bribe paid to him was regarded as not being illegal in Iraq and therefore not having legal implications in Australia. That is a clear loophole in the law.
The incredible thing is that a royal commission can find that the AWB deceived the Australian government and the United Nations by paying kickbacks and recommend that former executives face charges and yet those kickbacks were not bribes under Australian law and are legitimate tax deductions. I think Australian taxpayers are very disappointed that $90 million of their money has been given to AWB as a tax deduction. Amendments to the Income Tax Assessment Act 1997 align the definition of a bribe with that in the Criminal Code. The amendments provide that payments to foreign public officials are tax deductible only where the benefit paid is expressly required or permitted by written law, regardless of the results of payment or the alleged necessity of the payment. Failure to obtain the advantage sought by the bribe will not be relevant in determining whether a benefit paid is a bribe to a foreign official. The definition of facilitation payment in the Income Tax Assessment Act 1997 will also be aligned with the definition in the Criminal Code Act 1995. Facilitation payments are tax deductible and are not a bribe to a foreign official. The amendment means that under the tax law and Criminal Code an amount paid to a foreign public official is not a bribe only if the value of the benefit is minor in nature and incurred for the sole or dominant purpose of securing or expediting the performance of a routine government action of a minor nature. Currently the tax law makes no requirement that the value of the benefit be of a minor nature for a payment to be regarded as a facilitation payment.
This is something that the Labor Party has been talking about for some time. My predecessor as shadow Assistant Treasurer, the member for Hunter, moved amendments to the Income Tax Assessment Act 1997 to make this happen. He moved amendments on 28 March 2006 to the Tax Laws Amendment (2006 Measures No. 1) Bill 2006. The amendments provided that a payment under the Income Tax Assessment Act 1997 would not be a bribe if the value of the benefit was minor in nature and the payment was recorded consistent with the Criminal Code. The government—which has now introduced this bill—voted against that amendment. So there is a real inconsistency here. Labor’s amendments align the definition of ‘facilitation payment’ in the Income tax Assessment Act 1997 with the definition in the Criminal Code. The Assistant Treasurer rejected Labor’s amendments to align the two definitions. He was asked a question without notice in this House on 27 February 2006. My predecessor, the member for Hunter, asked whether the government would support Labor’s amendments. The Assistant Treasurer replied:
... there was no need to follow on from such a stupid question as the member for Lilley put before—
That previous question was to the Treasurer.
This smacks of desperation by a desperate leader and a desperate opposition in relation to the Cole inquiry.
He was further dismissive, saying:
… there is no capacity under Australian law for a company to claim a deduction for a payment that is considered to be a bribe in another country.
That completely misses the point that the member for Hunter was making.
In another question, on 28 November 2006, requesting the Treasurer to accept Labor’s plan to align the definitions, the Treasurer also dodged the question. He stated that a bribe is not tax deductible under law—something we already know. He responded:
The Commissioner of Taxation has full power in relation to this matter. The question, unfortunately, is based on a false premise.
I know there have been some issues raised in recent days about the Treasurer’s credibility, and here is another one. The government come in and say: ‘The Labor Party do not know what they are talking about. You don’t understand; you’ve got a false premise; it’s ridiculous; it’s silly.’ Then, 12 months later, their bill quietly adopts the very thing that the Treasurer and the Assistant Treasurer were called on to do, in this House by the Labor Party, more than 12 months ago. So this is a matter of credibility. Whenever the government come in here in their arrogant fashion and say, ‘You don’t know what you’re talking about; you don’t understand the basic principles of taxation and the basic principles of tax law,’ let us remember the harmonisation of facilitation payments under the Criminal Code and the taxation act.
I am glad to see that the government have realised that they were wrong and have quietly adopted Labor’s policy on this matter. I do not intend to harp on it because we do welcome it, but it is only appropriate that I put it on the record that the former shadow Assistant Treasurer consistently called for the sorts of actions we are seeing in this bill today and was ridiculed in question time by those opposite. Today, they are the ones who deserve ridicule.
We welcome this bill. It is better late than never. It should have been done 18 months ago when the Labor Party called for it to be done. We have little faith in the credibility of the government when it comes to matters such as this. They fail the test of being vigilant in relation to matters such as this, because if they were they would have been doing this 18 months ago when the Labor Party called on them to do it. I support the second reading amendment that has been moved by the member for Hotham. I commend that to the House and commend the bill to the House.
It is a pleasure, as always, to speak in the Australian parliament as the federal member for Ryan, a beautiful part of the western suburbs of Brisbane, which I have the great honour of representing. I look forward to the support of my constituents in the years ahead. This bill goes to issues of trade, international business and Australia’s reputation. I think it is very important for members of the parliament to defend and promote our businesses and our nation on the world stage. Australian businesses are some of the most innovative and successful in the marketplace, and Australians in our very vibrant society can pride themselves on being citizens who promote integrity, not only in their personal lives but in the way they practise business free from corruption and bribery. This is especially true of our major international businesses which compete with the very best around the world.
In the 2006 Corruption Perceptions Index published by the not-for-profit group Transparency International, Australia ranked ninth, with a score of 8.7 out of 10—a very creditable ranking. It ranked ahead of virtually every comparable country: two ranks above the United Kingdom, at 11; five above Canada, at 14; eight above Japan, at 17; and 11 above the United States, at 20. The World Bank’s Governance Matters 2007 Worldwide Governance Indicators ranks Australia on the 95th percentile for control of corruption. It was for these reasons that the circumstances surrounding the manipulation of the oil for food program by AWB and the subsequent Cole inquiry were very disturbing to us in the parliament and in the country. The Howard government is to be congratulated on having the courage to commission the national inquiry following the Volcker report. Let us not forget that this was a royal commission, which had at its head a very distinguished Australian in Justice Cole. I think the International Trade Integrity Bill 2007 will reaffirm Australia’s commitment to a corruption-free international trade regime; indeed, a corruption-free international culture of business practices. We will continue our tough stance against foreign bribery and any contravention of United Nations regulations.
Importantly, this bill will protect the integrity of Australian exporters in the global marketplace. In June, the Minister for Trade launched the 2007 Trade statement, which reflected very well upon Australian exporters and Australian business men and women. The government is to be congratulated on its policies to promote the framework and climate in which Australian businesses can get on with what they do best: doing business here in Australia and around the world, particularly in our region. The Trade statement showed that Australia’s exports in 2006 were the highest on record, up some 16 per cent to $210 billion. That is more than double the 1996 export levels and a record in both value and volume terms. Nineteen of our of 25 exports reached record values. The success of our exporters and the growth in both numbers of exporters and profits since the Howard government came to office in 1996 is something we should be very proud of and continue to promote as much as we can. It is important to protect the integrity of those exporters who are competing with the very best and who are trying to do the right thing by operating in a corruption-free and trustworthy fashion, getting on with the business of putting their products and services out there with the best in the world.
The Ryan electorate has a very strong appreciation of the value of small business. It employs a lot of people in small- to medium-sized businesses. My constituents would be keen to know generally how Australia fairs in its exports of goods and services. I refer to the Trade statement, which was recently released by the Minister for Trade. It notes: coal, $23.3 billion; iron ore, $14.4 billion; personal travel, $11 billion; education services, a very important part of our economy—I have the University of Queensland in my electorate; students come from the region and other parts of the world to study at this very fine institution and deserve to have the very best quality of teaching and education—$10.7 billion; gold, $10.6 billion; crude petroleum, $6.7 billion; aluminium ores, $6.1 billion; aluminium, $5.9 billion; natural gas, $5.1 billion; beef, $4.9 billion; and professional business services, $4.5 billion. That is just a snapshot for the people of Ryan of some of the very significant dollars involved in our export industries.
It is very important to the Ryan electorate that businesses can flourish and the reason for this, of course, is that it contributes to standards of living, jobs and employment and strengths of our communities. If businesses are unable to practise, if they are unable to trade and engage in services with other businesses and consumers, at the end of the day that affects the livelihoods of everyday Australians. I think everyone understands how the Australian economy impacts upon their lives. We know that interest rates affect mortgage payments. We know that, as unemployment queues get longer, it becomes more and more difficult to get a job. We know that wages are critical to standards of living. But if we ask people about the nature of international trade, they might think it is something a little abstract. However, it is very important and it is critical for us to continue to promote trade in our overall economic architecture.
Australia’s success as an international trading nation is a very important aspect of our economy. One in five Australian jobs depends directly on exports. Interestingly, in the Ryan electorate in the western suburbs of Brisbane, the lives of almost 13,000 people are directly affected by the types of businesses for whom they work, because those businesses export to the region and to the world. It is very important for me to promote those businesses and to give them every opportunity of competing with other businesses interstate and in the region. But, of course, jobs also come from indirect trade. When we are buying foreign products, we must remember that that also gives Australians jobs. We do not want to get into a situation where the signal we communicate to the world is, ‘We will export our products and you can’t bring your products into Australia.’ No country and no economy would accept only a one-way flow of goods and services, such that Australian consumers cannot purchase Australian T-shirts made in China, such as the ‘Kevin 07’ T-shirts, which I understand were not Australian made. That was very disappointing. Nevertheless, it is a free market and a free economy, and no doubt those Australians who support the opposition leader will purchase them. But I remind them that those T-shirts were not made in Australia. And I am happy to continue to promote the fact in the Ryan electorate that those Rudd T-shirts were not made by Australian hands on the Australian mainland or in Tasmania. But that is for the record. I think all Australians are aware of that.
Trade is not just about goods such as T-shirts made in China; it also involves services. Services comprise some 80 per cent of the Australian economy, and we have to do all we can to promote service opportunities in the business world in Asia. I think that is an area where we can really make a lot of mileage for Australians because Asia is a growing region. With the technical skills and experience of our services sector, particularly the sheer talent and ability of our financial services sector, we stand to benefit to the tune of hundreds of billions of dollars. International trade has always been tied with Australia’s overall economic success.
In my presentation in the House the other day, I talked about the benefits of trade to Australia, starting back in the gold rush days. In the 1860s, the gold rush encouraged large-scale immigration and created a lot of wealth from gold exports. They made Australia a rich land at the time. Unfortunately, as we know, protectionist policies came into play in the last century which affected not only our economy but also the world’s economy. We do not want to return to protectionism. We certainly do not want to see the world turn inwards in the trade arena. We will do all we can in this country to ensure that Australian businesses can compete in a corruption-free and bribery-free type of international economic landscape.
Given how important international trade is to Australia, this bill is in response to the recommendations of the Cole report, which was tabled in the parliament on 27 November last year. It will amend the Charter of the United Nations Act 1945 to create a new offence for people or corporations who engage in conduct that contravenes a UN sanction enforced in Australia or recklessly provides false or misleading information in connection with the administration of a UN sanction. The bill will also introduce a strict liability for corporations which engage in conduct that contravenes a UN sanction enforced in Australia, including in relation to UN counterterrorism financing sanctions.
In addition, the bill will amend the Customs Act 1901 to introduce new criminal offences for importing or exporting goods sanctioned by the UN without valid permission and for providing information that is false or misleading or omitting information in an application for permission to import or export UN sanctioned goods. Also very important is the provision in the bill to amend the Criminal Code Act 1995 to ensure the defence under section 70 to a charge of bribing a foreign public official is only available where the advantage paid to a foreign official is expressly permitted or required by law, regardless of the results of payment or the alleged necessity of payment.
This is an important bill. It reflects the Howard government’s very strong commitment to supporting Australian businesses large and small. It reflects a very strong commitment to providing in our country a climate and legislative framework that will enable Australian businesspeople who are competing with foreigners to know that they have the full support of the national parliament, that they will be protected and that there is a clear signal that corruption and inappropriate legal business practices will not be tolerated at all.
We all know that the Leader of the Opposition made a name for himself in the community and within his own party over his embrace of this issue during the Cole inquiry. His attacks on the integrity and character of the Prime Minister, the Deputy Prime Minister and the Minister for Foreign Affairs were shameful. It was shameful to smear people’s reputations in the fashion that he did. I know that this is politics and we are in a robust democracy, but I think there should be a line drawn in the sand between policy attacks and character assassination of the worst kind upon individuals. The attacks on Mr Howard, Mr Vaile and Mr Downer were just awful. They carried themselves with great dignity in the face of intense smearing on the part of the Leader of the Opposition. I am very disappointed that someone would seek to do that in the battle for ideas in this country and in the battle for policy annunciation.
In any event, that seems to happen from the opposition. But, through all of this, the Howard government was resolute and it did the right thing. It initiated the Cole inquiry and a full investigation into the AWB. And now, in the wake of the inquiry’s findings, the damage done by the AWB’s conduct has been fully revealed. Let us hope that some good comes from that for Australian businesses. Let us hope that we are stronger legislatively for it and stronger in a cultural sense so that there is a strong appreciation in the Australian economy that our businesses must conduct themselves with propriety and also with honour in their dealings. At the end of the day, in the overwhelming number of cases, businesses that do that would stand to profit from that—because when you try to play too many games in business, and indeed in politics, you will probably get caught out.
My parents ran a small business; they had a little corner store. From running a small business they were able to put three children through university. My brother is a neurosurgeon, my sister is about to graduate from medicine and I have the great honour of representing the Ryan electorate in the western suburbs of Brisbane. Being in politics, I am perhaps the black sheep. My brother is a neurosurgeon saving lives in Brisbane at the Royal Brisbane Hospital. I see that my senior colleague from Queensland, the member for Fairfax, is in the chair. As Chair of the Standing Committee on Health and Ageing he knows how important doctors are—especially in Queensland. I should make the observation that doctors also run businesses, and they are also important. I read an interesting piece in the BRW recently which said medical tourism to this country could generate some $600 billion for our economy. What a massive amount of money! It would increase the standard of living for all of us.
I wanted to make the point that we want small- and medium-sized businesses to grow and make profits so that they can contribute more to their communities and Australian society at large. We want to see them flourish. We also want to see our big companies like BHP and Rio Tinto who compete with the giants of global business do very well. So this is an important bill. It promotes international trade in Australia in a cultural sense. It promotes the international standing of our companies, I think. I very much congratulate the government on this bill because, as someone who is very passionate about promoting Australian businesses, I think it is critical.
In the minutes I have left, I would like to draw to the House’s attention an article in the Wall Street Journal about Australia’s standing as a country that is open and supports economic liberty. Interestingly, Hong Kong ranks No.1, Singapore ranks No. 2, Australia ranks No. 3, the US ranks No. 4, New Zealand ranks No 5, the UK ranks No. 6, Ireland ranks No. 7, Luxembourg ranks No. 8, Switzerland ranks No. 9 and Canada ranks No. 10. For those who might be interested in international business, let me count back from the other end of the table. The last country on this list of 157 is North Korea. They are ahead of Cuba, Libya, Zimbabwe, Burma, Turkmenistan, the Republic of Congo, Iran, Angola, Guinea-Bissau, Chad, Burundi, Belarus and Venezuela. No disrespect to those countries, but I believe this shows that the countries and economies that are open and believe in giving their people opportunities to maximise their talents and engage with each other are the countries that flourish and prosper and end up with unemployment figures like Australia’s—which, at 4.3 per cent, is the lowest in decades and, at the end of the day, makes a difference to the lives of every Australian. I warmly commend this very important bill to the parliament.
The International Trade Integrity Bill 2007 seeks to repair the damage done to Australia’s trading reputation by the AWB scandal. Sadly, it is a case of locking the stable door after the horse has bolted. The House should not need to be reminded of this, but right from the outset let us make no mistake about what a big deal the AWB scandal has been. In an international inquiry into an international scandal it was an Australian company which came out at the top—a gold medallist in the kickback Olympics, far outstripping any other company in the race. The Volcker inquiry estimated the AWB kickbacks at $US220 million. The next biggest supplier, Chayaporn Rice Co. Ltd of Thailand, came in at $US42 million, less than a quarter of the AWB sum.
There is no starker example of how this bill seeks to lock the stable door after the horse has bolted than in its amendments to the Income Tax Assessment Act. The bill is amending the Income Tax Assessment Act to align the definition of facilitation payment with that in the Criminal Code. This is precisely Labor policy and has been so for quite some time. For example, in March last year Labor moved an amendment to the Tax Laws Amendment (2006 Measures No. 1) Bill to align the facilitation payment provision in the income tax act with those in the Criminal Code. The government used its numbers here to defeat this change. What have been the consequences of the government’s action? After the Cole report was handed down, AWB went off to the Australian Taxation Office and proceeded to claim the $300 million in kickbacks as a tax deduction. This is truly astonishing. AWB confirmed in late December, just before Christmas, that the tax office had ruled that the bogus trucking fees it had paid to Iraq in breach of United Nations sanctions in order to secure wheat contracts were not bribes and qualified as legitimate business expenses. AWB’s share price surged almost 10 per cent to $2.88 on the news that it had dodged a tax bill expected to be more than $100 million.
Commissioner Cole said that AWB was not guilty of the crime of bribery because the Iraqi officials who took the money from AWB were not breaking Iraqi law. This drew the not unreasonably incredulous response from Tracy Lee in the Australian Financial Review:
Australian companies wanting to pay bribes overseas should make sure they do it in really corrupt regimes if they want to get a tax deduction.
That is the ridiculous outcome from yesterday’s decision by the Australian Taxation Office that has let AWB keep up to $180 million in deductions claimed on the payment of bogus trucking fees to the former regime of Saddam Hussein.
The Australian Financial Review obtained a letter to AWB from the tax office stating that it had relied on the Cole report in making its decision to allow AWB to keep over $100 million in tax deductions. We had the Treasurer saying that he was relying on the Cole inquiry as well. He said that the probabilities are that the tax office is bound by the Cole inquiry. But Commissioner Cole made no findings on tax matters, saying that it was ‘beyond the technical and resource capacity of this inquiry to conduct a detailed investigation’ into the tax treatment of the kickbacks. He drew ‘to the attention of the Commissioner of Taxation the fact that this matter has not been the subject of any inquiry by me’. But, elsewhere in his report, Mr Cole said that the payments were ‘not unlawful in Iraq’.
So we ended up with an astonishing situation. Each of them—the Cole commission, the tax office, the Treasurer—is saying: ‘Don’t look at me. It’s not my job to stop AWB from getting a tax break for these kickbacks.’ Whose job is it? If the Treasurer had not been so preoccupied with trying to undermine the Prime Minister by giving off-the-record briefings to journalists, maybe he would have taken a good look at Labor’s amendment instead of imperiously dismissing it. And, if he had taken up Labor’s amendment, Australia’s hardworking taxpayers would not now be in the outrageous situation of bankrolling bribes to Saddam Hussein.
The Treasurer claims this was not the case and says the tax office was bound by Commissioner Cole’s findings. But he produces no evidence for that; he simply asserts it. It is absolutely unconvincing. The shadow Assistant Treasurer, the member for Prospect, was quite right to bring to the attention of the House the history of this matter, with the member for Hunter having raised it in question time and having been dismissed by the government. Now we have the real proof of the pudding in the eating. Now we have before the House the very provision which Labor moved in March last year and which the Liberal Party rejected. The Treasurer says we are wrong, but he knows we are right, and this provision—to align the facilitation payment provision in the tax act with the facilitation payment provision in the Criminal Code—is the proof that the Treasurer knows we are right.
In introducing the bill the Attorney-General said the bill ‘continues Australia’s tough stance against foreign bribery and contravention of United Nations sanctions’. I had not realised until I read this that the Attorney-General possesses a sense of humour. This kind of remark is increasingly characteristic of a government grown out of touch and which has forgotten Abraham Lincoln’s classic ‘You cannot fool all of the people all of the time’. The Attorney-General went on to say, ‘We have a reputation as a corruption-free trading partner.’ The problem is that this government has allowed that reputation to be trashed. Its response to the UN’s Volcker report, the Cole inquiry, unfortunately turned into a monumental whitewash. It has achieved nothing by way of ministerial accountability for this debacle. It has achieved nothing by way of departmental or public service accountability for this debacle. It has achieved nothing by way of reform or restructure of AWB. It has achieved nothing in terms of prosecutions for individual wrongdoing. As I mentioned before, the crowning glory, the piece de resistance, was that, once the Cole report came down, AWB proceeded to claim the $300 million in kickbacks as a tax deduction and the tax office and the Treasurer went along with it.
I want to substantiate each of those claims in turn. First, there has been no ministerial accountability for the AWB scandal. The Minister for Foreign Affairs approved 41 contracts over a five-year period—contracts which contained over $300 million in bribes that have cost Australia’s international trading reputation and Australian farmers dearly. Minister Downer made a virtue of his ignorance. He revelled in the fact that Commissioner Cole did not find he was criminally culpable. But the government had limited the terms of reference of the Cole inquiry to such an extent that it was unable to meaningfully evaluate the culpability of the government.
This is not a scandal that the government can disown. Under the relevant Security Council resolutions, national governments have a clear obligation to monitor compliance with the sanctions regime under resolution 661. Governments cannot escape responsibility merely by claiming that their national companies circumvented sanctions on their own initiative. Nor did the Cole commission have anything to say when evidence emerged contradicting government claims to the commission that it did not know about AWB’s payments of kickbacks to the Iraqi government.
First there was Alia. The government claimed that it knew nothing about this Jordanian company, through which kickbacks were laundered, until the Volcker inquiry in 2004. But an email in September 2003 showed that Austrade officials met with the al-Khawam family—51 per cent owners of Alia—and the former head of the Iraqi Grains Board in 2003. Then there was the case of Tigris. The Minister for Foreign Affairs and other Howard government personnel claimed to the Cole commission that the first they knew about Tigris Petroleum’s plan to defraud the oil for food program of $US8.8 million was through the Cole inquiry itself and that they had not heard of Tigris at all until 2003. But an email from AWB’s government relations manager, Matthew Foran, says that he spoke with Minister Vaile’s office in September 2002 advising the government to not make any public comment about a statement by the Iraqi embassy which explicitly referred to the Tigris deal. The email states that Minister Vaile’s office contacted the offices of the Minister for Foreign Affairs and the Prime Minister to warn them of the statement by the Iraqi embassy. The Howard government was caught out misleading the Cole inquiry, first over Alia and then over Tigris, but the Cole commission failed to follow up these matters or deal with them in its report.
Nor has the Cole commission achieved anything at all by way of departmental accountability. Minister Downer simply ignored Commissioner Cole’s findings of incompetence and negligence and announced that there would be no review of administrative practices within the Department of Foreign Affairs and Trade. This was incredible. It represented an all-time low in public accountability standards. It would seem like society is to blame. There was $300 million in kickbacks and society is to blame. Nor has the Cole commission achieved anything in the restructure of AWB. Michelle Grattan reported:
Ministers have signed off on a political compromise for the new bulk wheat export marketing system designed to get the Government through the election.
A “kitchen cabinet” of John Howard and senior ministers decided farm organisations should be given until March to either set up a new grower-owned and controlled company to run the single desk, or have AWB demerge and AWB International operate the desk.
The Cole inquiry achieved nothing on this front either. We now know that the single desk—AWB’s export monopoly, also known as the National Party’s compulsory unionism—lives on. Two and a half weeks ago, on 30 July, Lenore Taylor reported in the Australian Financial Review:
Angry backbenchers have accused Agriculture Minister Peter McGauran of using stalling tactics to protect wheat exporter AWB’s monopoly status, after it emerged he had approved only three out of 85 applications from other wheat exporters since he was handed approvals power last December.
the member for Hume—
said it was “reprehensible” that so few licences had been approved, and some applicants he knew had been waiting for up to six months for a ministerial decision.
“The system is obviously too slow … I know some growers who are being denied $55 a tonne more than they can get from AWB because exporters can’t get a decision out of the minister,” Mr Schultz said.
The report goes on to say that the member for O’Connor, who is described as ‘outspoken’—I think he can live with that—said that he suspected the minister was using his decision-making power:
as a disruptive tactic … to make sure applicants did not have time to get arrangements in place before the forthcoming harvest.
The article continues:
Mr McGauran confirmed he had approved only three applications. He said nine applications were still pending. The rest he had rejected on public interest grounds.
This led to OzEpulse, which is a Sydney based grain exporter, urging the federal government to reverse its rejection of an export licence application to send 50,000 tonnes of Australian wheat to Yemen or face a Federal Court challenge in September. Some 80 per cent of Western Australian growers last year refused to sell to AWB. OzEpulse has launched a legal challenge, scheduled for mid-September, to last December’s original licence rejection, claiming that the Minister for Agriculture, Fisheries and Forestry took into account irrelevant or false information. OzEpulse said that it was having the content checked because if the AWB submission looked false, misleading and untrue, and if they misled the minister—which is not that different from their actions in the Iraqi affair that sparked the Cole inquiry—they have a basis for a legal challenge. So, as far as the AWB and the agriculture minister are concerned, compulsory unionism lives on.
The bottom line is that, despite repeated emails and communications to ministers, their officers, staff and senior bureaucrats, commencing virtually from the inception of this scandal back in 2000, AWB was still able to provide some $350 million in funds to the Saddam Hussein regime in breach of the UN sanctions and Australian law, specifically the Customs (Prohibited Exports) Regulations 1958. No legislation, no matter how comprehensive or wide ranging, can have any effect when the government is willing to turn a blind eye and is unwilling or unable to enforce its own laws. This bill simply serves to highlight just how duplicitous the government has been regarding the whole AWB saga. The fact is that this government failed to enforce its own law and, through its negligence, allowed $350 million to be channelled to a terrorist dictator.