IRAQ: Baghdad bid may leave AWB in cold

MARK Vaile will press Iraq to buy Australian wheat even if the nation's monopoly wheat exporter AWB is excluded from the deal.

The Deputy Prime Minister, who will lead a mission to Iraq to save hundreds of millions of dollars in lost wheat sales, said yesterday he wanted a "clear indication" Iraq would "consider Australian wheat through another exporter if necessary to go into that tendering process".

Mr Vaile confirmed yesterday that AWB chairman Brendan Stewart had been dropped from the rescue mission to Iraq amid concerns that his presence would jeopardise Australia's hopes of snaring the lucrative deals.

Despite being excluded from the trip, AWB sought to pacify angry grain growers yesterday by pledging to fight to keep its monopoly hold on wheat exports. At a rowdy annual shareholders' meeting in Melbourne, Mr Stewart said he would battle "tooth and nail" to retain the single desk for wheat exports.

Mr Vaile, who will travel to Iraq in coming days with Liberal senator Jeannie Ferris, said only government representatives would take the risky trip. But he denied AWB had been "dumped" from the delegation, instead claiming AWB had voluntarily stood aside from the overseas mission.

Asked yesterday whether the Government would apologise for the kickbacks to Saddam Hussein's regime - and the resulting Cole commission - Mr Vaile said: "Obviously the circumstances that have evolved and are still subject to the investigations of the Cole inquiry are regrettable, we should acknowledge that."

Mr Vaile and Senator Ferris, along with a small group of bureaucrats, will meet Iraqi Deputy Prime Minister Ahmed Chalabi, Trade Minister Adbul Basit Mawlud and officials from the Iraqi Grains Board in Baghdad.

Getting Australia back into the million-tonne Iraq deal could involve creating a temporary alternative for exporting bulk wheat that does not involve AWB, which stands accused of paying $290 million in kickbacks to Saddam's regime under the UN's corrupt oil-for-food program.

Iraq's state grain trading company said that despite the anger against AWB, they would not stop importing from Australia.

"We can deal with other companies if they could provide us with our needs," spokesman Khalil Aassi said.

"What has happened doesn't mean we should cut ties with Australia. This scandal is just with the AWB."

The Vaile trip comes on the eve of the Cole corruption inquiry turning its attention to the knowledge of the Government, its ministers and officials.

The key witness at next week's hearings will be Bronte Moules, a DFAT assistant secretary in Canberra who worked at Australia's permanent mission to the UN in New York when AWB first started paying bribes.

In an April 10, 2001, diplomatic cable, Ms Moules alerted John Howard, several of his cabinet ministers and most senior bureaucrats that Iraq was corrupting the oil-for-food program.

Last night, the ABC made another claim about the Government backing AWB before last year's UN inquiry that exposed the kickbacks, despite numerous warnings of potential problems with oil-for-food contracts over the previous four years.

The Australian has confirmed from government sources that after a meeting with AWB on October 4 - at which Foreign Minister Alexander Downer told company officials to meet UN inquiry head Paul Volcker - Australia's UN representative, John Dauth, helped to arrange a meeting between Mr Volcker and AWB executives.

The ABC said Mr Downer took at face value AWB's insistence it did not pay kickbacks and made no independent checks, despite knowing for months that Mr Volcker had trouble getting to the truth about the payments.

Outspoken Liberal MP Wilson Tuckey called yesterday for AWB to release wheat growers from their commitments to the national pool so they could sell their wheat to Iraq through other companies. "It could be done by consent. If someone rang up and said 'I want to buy my wheat back', all it requires - if AWB puts the farmer ahead of its own interests - is for AWB to say OK," Mr Tuckey said.

"They would transfer it to another pool, whomsoever has created the pool, for the purposes of servicing the Iraqi market."

Jeannie Ferris, chairwoman of the Coalition's agricultural committee, said yesterday the Iraq meeting would have no impact on the future of the single-desk bulk wheat-marketing arrangements, which are coming under tough scrutiny as a result of the AWB kickbacks scandal.

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