The Australian Wheat Board Scandal

The Australian pale yellow circuit card ScandalIntroductionThis judge will discuss the primary authoritiesal structure and causes of the Australian Wheat Board scandal, here by and by referred to as AWB. This was a scandal of international magnitude, whereby AWB paid veritable monetary bribes to Iraq decreeds in blatant non-compliance of the regulations set push through in the Oil-for-Food computer planme which was established by the fall in Nations. Moreover, this essay will discuss the exhibit presented in the shekels Royal Commission, an enquiry established to investigate the drive of several Australian companies in relation to the oil-for-food program AWB a governmental disposal was the foremost organisation down the stairs scrutiny.This essay will to a fault examine the regulatory failures that facilitated corruption at the governmental level to occur, and which remained predominantly unfettered for a protracted period. Incidences of governmental and corporat e corruption and degenerate behaviour, which often involve considerable numbers of active or nonoperational participants, atomic number 18 seldom the result of opportunism alone, but atomic number 18 farthermost more(prenominal) often insidious and methodical by nature. The AWB case is a get in illustration of governmental corporate culture and demonstrates a plethora of systemic regulatory and insurance policy failures, totally of which supercharge influenced and defined the AWBs decision-making attend and unethical posture. Lastly, the aforementioned material will be discussed commencing with a apprize summary and literature review, and a comprehensive case analysis in order to demonstrate the ubiquitous nature of this particular type of organizational evil, which sits under the broad ambiguous umbrella of clerical crime.Brief summaryContemporary society in a globoseised world demonstrates an almost overpower abundance of barbarous activity in particular pertain ing to white-collar crime however, numerous researches demonstrate that not all crimes and miserables are dealt with in the homogeneous manner (Chambliss, 1989). In fact, on closer examination, research has suggested that there is an indwelling tendency for specific crimes and criminals to be positively overlooked, typically these being crimes of the powerful, (Ditton, 1977 Box, 1983 Chambliss, 1989 Muncie, 1996) .primary casing is that of the AWB scandal.The questionable Utilitarian approach of seeking the sterling(prenominal) good for the greatest number of people (Kay 1997) found to be assumed by the AWB and its Board, is analysed in the clams Enquiry Report. The kale Report stimulated awareness to the central deficiencies in both corporate governance and culture, which play a noteworthy function in permitting or precluding the occurrence of unethical conduct (Kay, 1997). Furthermore, the inertia demonstrated by the Australian Department of foreign Affairs and slyness hereafter referred to as DFAT, and the Australian Federal Government in study claims against AWB further highlights the systemic failures that permitted AWBs unethical behaviour to prevail (Gibson, 2000).The key causes of, and major(ip) influences on unethical behaviour determined from the Cole underwrite are-The AWB organisations strong profit driven demand to meet financial or business objectives, and the promotion of tolerance for wrong/criminal acts (white-collar crime) (Overington, 2006)-A culture of get the job done, where corrupt acts are justified under the proviso that the greatest good will be achieved for the fellowship (Overington, 2006)-A lack of control mechanisms and clean agents in both corporate and public sector governance (Overington, 2006)-The entailment of privatisation of Australian rural entities (Bartos, 2007)-Policy and Regulatory design and the lack of adherence and slaying (Bartos, 2007)-Governmental oversight of shuck growing monopoly, internatio nal monopolisation (Bartos, 2007)-Conduct of foreign policy misconduct United Nations Oil-for-Food-Program International Trade Sanctions )Bartos, 2007)One crucial cyclorama to be considered is that Australia is a signatory to both the United Nations rule Against putrefaction and the Organisation for Economic Cooperation and Development Convention on Combating Bribery of Foreign Officials in International Business Transactions. Australias interpretation of the aforementioned United Nations Convention is The Criminal Code Amendment (Bribery of Foreign Public Officials) Act, referred to as the Bribery Act, which is the Australian Parliaments legislative implementation of the latter conventionLiterature ReviewIt is car park knowledge that conventional criminals consider it practice to utilise any musical instrument or weapon to perpetuate a crime, so, it would also seem normal for organisations to utilise the organisation itself to acquire money from victims by way of its aber rant misbehaviour (Harris Hartman, 2002). These victims are varied and whitethorn be customers or the members of the organisation themselves (Harris Hartman, 2002). This is a prime example of what is referred to as the organisational weapon the organisation is for white-collar criminals as the gun or knife is for conventional criminals (Wheeler and Rothman, 1982, cited in Punch, 1996).Harris and Hartman (2002), advance that an organisations culture consists of the set, norms, and attitudes of the people who intrinsically make up the organisation. Moreover, the declared values demonstrate what is important whereas norms reveal expected behaviour attitudes expose the mental capacity of individuals (Hall, 2006). Therefore, organisational culture informs people what is important in the organisation, expected behaviours, and how to observe things (Hall, 2006). finish is a part of organisational life that influences the behaviour, attitudes, and overall effectiveness of all members of an organisation (Gibson et al, 2000).Further to this, Daboub Coulton (2002) stressed the importance of organisations selecting business partners who share a like commitment to both the social and environmental practices and ethical commitment of the company. They further stated that this would instigate in ensuring that the organisation is not placed in compromising situations due to unethical acts perpetrated by those companies with whom they dupe working associations (Daboub Coulton, 2002). Robbins (2000) argued that todays global business environment can lead to such problematic associations, and stated the need for organisations to take a fervent pro-active stance to further discipline that the codes of conduct under which they operate are transparent, implicit and adhered to by their associates (Robbins, 2000 Daboub Coulton, 2002).Furthermore, the political influence on large governmental or privatised organisations and the desire not to over-regulate can also be ver y influential. Politicians are mindful of the pestilential effect that heavy regulation can submit on businesses that are often generous economic contributors. The will of governments not to introduce laws that stymie corporate activity is evidenced by the lack of square(p) powers and penalties (specifically prison terms) available to regulatory bodies, the lack of resources available to enforce those provisions already available and governments commitment to regularly review any legislation that may impact adversely on competition.Case AnalysisThe United Nations Oil-for-Food program involved not only companies but also governments however, various activities by the Howard Government were emergeside the provisions of reference of the Cole Enquiry, which was fundamentally basic to examine the actions of the companies specifically mentioned in the 2004 United Nations report on the Oil-for-Food program. Furthermore, Cole was unable to examine the extent to which government polic y during that period back up or discouraged bribes from the AWB, or equally as to whether Australian Government Ministers should have enquired further, especially considering that warnings were codd that something was inappropriate, or indeed how the government managed its consanguinity with the AWB end-to-end this protracted process.To illustrate further, Henry Bosch former chairperson of transparentness International Australia and also one of Australias most experienced business regulators, argued that somebody, somewhere must have known what was going on. Bosch stated to the Ethical confederacy that he suspected, that the executives involved in winning contracts were a bit little careful than they should have been regarding the status of payments being demanded. The AWBs justification for this deviant and criminal behaviour was to argue that it simply was not aware of the payments. Moreover, numerous critics pointed out that it was virtually impossible for government Minis ters and various other officials to not have known, especially due to the fact that the fees paid to the contractors selected by Saddam Husseins bureaucrats would have been noticeably and remarkably high, in fact, the AWBs responses plainly raised far more questions than answers.Further to this, the Cole Enquiry argued that the AWBs structure was primarily to blame, for example the company was responsible for the market place placeing and exportinging of one of Australias major export commodities. Moreover, all Australian chaff exports passed through the offices of the so-called single-desk export authority, which was heavily vested in the AWB. The single-desk export authority was established in 1915 to assist Australian straw growers to get their produce to global export markets, therefore dealing with the AWB was a major factor for all businesses involved in Australias powerful blabbermouthed wheat growing sector.In addition to this, Iraq was a massive market and there was a need for the organisation to justify its often-criticised monopoly on Australias global wheat exports, particularly in the face of strong competition from the United States and other suppliers. Numerous critics observed that, since the AWB was privatised in 1998, and consequently listed on the Australian Stock Exchange (ASX) in 2001 the AWB had noticeably become far more extreme than its former bureaucratic culture might have previously endorsed.Furthermore, a United Nations report on October 27, 2005 established that the Australian Wheat Board (AWB) had paid $US221.7 ($AU300) million in bribes to the Iraki Government between 1999 and 2003 under the United Nations Oil-for-Food program (Whitton 2007). Through this mode of immoral and illegal behaviour, the AWB defrauded their shareholders out of their financial investments and profits as well as do irreparable damage to Australias trade account globally. Further to this, the United Nations report on the inquiry into corruption in the Oil-for-Food Program, led by capital of Minnesota Volcker, revealed that 2200 companies participating in the program were misappropriating funds from the United Nations accounts to redistribute them to the Iraqi government but none of the magnitude of the AWB.Moreover, the AWB was a company with a high profile and facing a serious legal problem, therefore the AWB was manifestly likely to draw attention from both the Australian and world(a) public and media (Lukaszewski, 1997). Consequently, with the release of the report and mass media and public attention (Mackey, 2002), the AWB was obviously facing a dire crisis. Due to this in February 2006, the AWB managing director Andrew Lindberg resigned after demonstrated outrage throughout the press and collective Australian wheat growers.The AWB scandal has left an indelible black mark on the AWBs reputation throughout the world, and puts into question how reliable it was and how well suited it was to represent and market nearly all of Australias wheat to the overseas marketplace. In addition, the AWB was sued for AU$1 billion in compensation by collective wheat farmers in North America for alleged, bribery and other corrupt activities to corner the whit markets internationally (news.com.au, 2006). The effect of the scandal resulted in Iraq refusing to purchase wheat from the AWB and the important loss of a substantial overseas market for Australian wheat growers.In an attempt to minimise damage to the Howard Governments reputation, Prime Minister Howard launched an official enquiry in November of 2006, into the payment of bribes by the AWB Ltd, formerly known as the Australian Wheat Board, to the Saddam Hussein regime, this enquiry essentially produced a whitewash report designed for several key purposes. Foremost, was the need to clear Prime Minister John Howard and his leading ministers of any political and/or criminal responsibility pertaining to the payment of bribes to Iraqi bureaucrats. Another critic al occupation was to fend off United States agricultural interests that were demanding the dismantling of the AWBs wheat export monopoly as part of a ruthless trade war.To illustrate further, it was absoloutely prevalent for the Howard government to prevent any examination of the motives behind Canberras participation in the U.S occupation of Iraq. Therefore, in an obvious act of scape-goating, enquiry Commissioner Cole singled out 11 former AWB executives and one ex BHP executive for blame, and the possibility of criminal prosecutions. Sanctioned by the Howard government the mass media immediately did its best to assist this diversionary exercise by dubbing these 12 individuals the dirty-dozen in paper headlines around the country, demonstrating the great measures that politicians will take to cover their corruption.Howards use of Cole, a trusted lawyer who had previously conducted a witch-hunting enquiry against building workers on behalf of Prime Minister Howard wreaks of the unfettered abuse of governmental power. It was therefore not surprising that Cole attributed the payment of nearly $AU300 million in bribes under the United Nations 1996-2003 so-called Oil-for-Food-Program solely to a handful of 12 individuals. Moreover, Cole stated that these 12 individuals deviant corrupt behaviour developed from a closed culture of superiority and impregnability within the organisation, which had been produced by the AWBs 67-year monopoly and secureness over all Australian wheat exports.In addition to this, Cole stated that it was obvious that the AWBs unethical policy in Iraq was to do whatsoever is necessary in order to retain the $AU500 million in yearbook wheat sales, and further stated that was precisely what the Howard Governments policy was at the time. The substantial and comprehensive documents tabled at the Cole enquiry confirm that the AWB, which was a government agency up until 1999 and then subsequently privatised continued to operate and receive Canberras protection, almost as a virtual arm of the Howard Government throughout the lead-up to the March 2003 U.S. led invasion of IraqConclusionThe AWB scandal raises significant questions and concerns pertaining to the Australian policy-making processes and the attitudes of the government ministers involved.