The Monopoly Wheat Exporter and the Dictator

Abstract

At roughly the same time that the grains industry was debating the future of organisational arrangements for a restructured Australian Wheat Board, important developments were taking place at international level which were to prove the ultimate undoing of the single desk. This chapter discusses AWB Limited’s involvement in the United Nations Oil-for-Food program and the implications for the wheat industry when these activities came to light following the invasion of Iraq in 2003. It begins with a discussion of the UN sanctions regime and its impact on Australian wheat exports and then describes the policy changes that occurred following revelations of AWB Limited’s role in assisting Saddam Hussein’s regime to ‘game’ the Oil-for-Food program. Although the Oil-for-Food scandal created great consternation in Australia, it is not entirely surprising that the newly privatised company behaved as it did. The chapter draws on the economic sanctions literature in suggesting that the company’s activities should have been predictable. It also points to the timing issue. The Oil-for-Food program and the implementation of the privatisation occurred in parallel, blurring the lines between the activities of the government statutory authority and the privatised company.