Laying the Foundations for the Wheat Scandal: UN Sanctions, Private Actors and the Cole Inquiry

Abstract

Throughout 2006, Commissioner Terence Cole QC conducted an inquiry into the involvement of Australian companies in the United Nations' Oil-for-Food Programme in Iraq. The inquiry generated headlines about sanctions-busting behaviour on the part of AWB Limited and whether or not government ministers knew or should have known what was happening during the life of the Programme from 1996 to 2003. An element of the scandal that has received little attention is whether AWB Limited's behaviour was actually that extraordinary, given its status as a private company whose obligation to its shareholders was to maximise profits and which, had it not complied with the Iraqi government's demands to bypass the sanctions regime, could have cost the company a very important market. Drawing on the sanctions literature, this paper examines an essential problem at the heart of sanctions implementation; namely, that while states sign on to these international obligations, it is private companies and individuals that generally bear their cost. The paper considers legislative changes prompted by Commissioner Cole's Report but emphasises their limitations. A key and persistent difficulty for Australia and other states is that enforcing their international obligations depends on the goodwill and integrity of private actors.