John Howard, Australia’s prime minister, yesterday said AWB, the wheat exporter, had agreed to give up temporarily its monopoly on exports to enable non-member wheat growers to bid on an Iraqi deal from which it had been barred.

AWB had “indicated its willingness on a voluntary basis not to exercise its veto on this tender to secure a positive outcome for Australian wheat growers”, Mr Howard told parliament after a meeting with Brendan Stewart, AWB chairman.

Under Australia’s single-desk monopoly system, AWB can veto the country’s exports of bulk quantities of wheat from non-members.

However, Mr Stewart said it would ease its export veto only as a “last resort” if a delegation bound for Baghdad failed to break the impasse.

AWB is under official investigation following allegations published in a United Nations report that it paid A$300m ($222m, €187m, £128m) in bribes to Saddam Hussein’s regime to secure wheat sales during the UN oil-for-food programme.

The delegation, announced by Mr Howard yesterday and to be led by Mark Vaile, the trade minister, follows this week’s surprise decision by the Iraqi Grains Board to suspend contact with AWB until the official inquiry has concluded, in effect banning Australian wheat farmers from bidding for a 1m tonne contract.

Mr Vaile, who is also deputy prime minister, will be accompanied by executives from AWB on the trip, and is set to leave this week.

Iraq’s move has fuelled worries among Australia’s wheat farmers that their US rivals may steal their lucrative export market.

Mr Howard has repeatedly said the government had no knowledge of bribes but commentators said yesterday that Mr Vaile’s dash to Baghdad was a sign the prime minister was growing increasingly concerned about the potential political fall-out from the affair.

Mr Howard said: “The whole purpose of this mission is to promote the interests of Australian wheat growers.”

News of the trip came as the official inquiry into the scandal was shown the first direct evidence linking AWB with illegal payments.

An internal AWB market briefing, dating back to at least mid-2001, contained explicit evidence that AWB knew the “trucking fees” it paid to Jordanian transport firm Alia to deliver wheat were going straight into Mr Hussein’s coffers.

The brief read: “Inland transport fees are paid via Alia in Jordan who then pay the Ministry of Transport in Iraq.”

The brief was stored electronically on the database of AWB’s international sales and marketing division. Lawyers are probing whether it was sent to the Wheat Export Authority, the federal government agency that regulates AWB.

John Agius, counsel to the inquiry, said: “The documents make plain that from as early as 2001 market briefs for Iraq reflected a knowledge, and a body of knowledge within AWB, that fees being paid to Alia were being passed by Alia to the Ministry of Transport in Iraq.”

Chris Whitwell, an AWB marketing manager since 2002, told the inquiry yesterday he knew the Alia payments were ending up with Iraqi government agencies. He said he never questioned the arrangements because colleagues had assured him that they had UN approval.

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