Magazine of the Socialist Party, Australian section of the CWI

AWB scandal highlights big business corruption

The Australian Wheat Board (AWB) has been caught red handed supporting the regime of Saddam Hussein through the use of bribes disguised as trucking fees in order to keep its wheat sales.

It is clear that it is not just in those states that can be described as crony capitalist that bribery and corruption is what makes the capitalist wheels turn freely. Corruption is at the heart of capitalism and is alive and well in Australian capitalism.

Wheat sales from 1997 to 2003 were worth at total of $US 2.3 billion, the bribes were a small price to pay. These bribes were seen as necessary because of the cut throat nature of the world wheat business i.e. if AWB did not do it then some other company would and they would get the wheat contracts. The Howard government has used its usual response of claiming not to know anything about what was going on. Just like the ‘children over board’ incident this leads to one of two conclusions; either they did in fact know, and turned a blind eye or they should have known.

Australia has had its share of corporate corruption scandals for example One-Tel and HIH. And of course corporate corruption is well known throughout the world, a prime example is Enron. It is not just AWB in Australia that is implicated, in 1996 BHP (now BHP Billiton) financed a $6.7 million wheat sale to Iraq, AWB announced to the Australian Stock Exchange in January that in fact the wheat had been paid for in exchange for oil exploration rights. BHP Billiton has announced its fifth successive record profit of $5.9 billion for the six months to 31 December 2005.

The details of the AWB involvement are still being exposed but the exposure began with the UN investigation into the food for oil scandal (the Volcker report) where various companies were able to supply funds directly to the Saddam regime instead of only supplying food. The Volcker report was set up in order to discredit the UN and its Secretary General Kofi Annan but went on to uncover a web of corruption across the world. Over 2,200 international companies were involved in the payment of bribes to the order of US $1.8 billion. AWB was the largest single contributor paying about 14% of the total.

AWB through the use of supposed trucking fees paid to a Jordanian trucking company paid upward of $300 million dollars directly to Saddam Hussein’ regime in order to maintain its wheat sales. It even claimed much of the transport fees as a tax deduction.

This is a clear violation of those ethical standards that the company is supposed to be adhering to. It also brings to light the dubious nature of many of the tax deductions that many companies are able to avail themselves of that ordinary worker tax payers are not. Neither of these things would come as much of a surprise to the Australian worker.

It is clear from the example of AWB and from those companies that went before it in Australia and those companies through out the world that capitalism not only is corrupt through and through but that it requires this corruption in order to be able to survive. Proposed solutions such as taking away the AWB monopoly of wheat exports will do nothing to stop such corruption that is part of the nature of capitalism. The only solution is the nationalisation of the AWB under workers control and management and the similar nationalisation of other commanding heights of the economy.

By Gary Duffy