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The Forum > Article Comments > AWB Scandal: a wake-up call for Australia > Comments

AWB Scandal: a wake-up call for Australia : Comments

By Krystian Seibert, published 9/2/2006

The AWB scandal should make Australians examine how we allocate power in our society.

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Single desk selling was an excellent marketing tool for Australian farmers prior to corporatisation. It is extremely difficult for farmers to compete against markets that are highly subsidised as markets undercut each other to drop the price farmers receive.

Single desk went wrong when AWB corporatised and I find it too much of a coincidence that the Federal government passed legislation in July 1999 which is the same month as AWB approved the deal to pay inland transport fees via Alia to Saddam Husseins regime.

Since corporatisation, farmers have been paying higher and higher costs to pay for the shareholder dividends.

This AWB scandal involved paying very high "transport costs" and then recouping this by charging a very high wheat price. AWB was supposedly revenue neutral in this deal. AWB paid the Iraq government and then got paid by the food for oil UN account.

Unfortunately, AWB and their staff did profit from farmers with this deal. With the remuneration bonus and outperformance incentive schemes based on incentives for higher costs and higher prices, farmers paid AWBL shareholders and staff very large sums of money for something that farmers did not benefit from. We also paid AWBL interest on the money that was held up for months at a time between payment of costs and payment for wheat.

Yes, AWB has abused their single desk privilege but it doesn't mean that we don't need some form of market control
Posted by NonGMFarmer, Sunday, 12 February 2006 1:57:30 PM
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A basic explanation of how AWB works (pools, remuneration bonus etc) can be found in the GGA submission to the Cole enquiry . http://203.94.171.34/offi/images/SUB.0001.0011.pdf. The remuneration bonus is on page 5. Basically, any price overinflated above the normal wheat price is considered a good performance and AWB have the capacity to charge farmers up to 20% of this even if farmers did not get the real benefit.
I do agree though, there are some very good staff in AWB but farmers should not have paid a bonus for a benefit we did not receive. We deserve honesty and transparency.
Posted by NonGMFarmer, Sunday, 12 February 2006 2:04:22 PM
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One major factor that has been forgotten in this charade are the farmers who rely on the export dollar for their produce as a head falls in the AWG Iraq contract with an Australia company.

The Priminister and his Deputy have held their hands up flat, to distance themselves.

Both Insisting that their roles were to make courtesy calls and confirm this courtesy through written communications also to congratulate organises of the deal.

Mark Vaille could not recall details and had to refer to his diary schedule five years ago to recall meeting he had with associates of this Australian contract with Iraq.

As the enquiry moves forward, links between government representative with regards to how much they knew about the kick backs that were paid to Suddam.

It has been suggested that a figure of 330 million had been given to Iraqi regime in the disguise of the "Food for oil" program organised through the United Nations.

The invoices created were for courier and trucking costs through a known Iraq owned trucking company.

It has been discovered that American congress wanted to investigate two years ago but was pacified by an Australian diplomat in America who liaised with congress officials.

Any accusations or suggestion by the American congress representatives was put down to competition between the countries with regards to this contract deal.

One can understand the Priminister comments to the Labour opposition in regards to the ongoing investigation into accusations.

Although the Priminister is a little late to ask for Opposition silence to try and shield the massive damage it has caused to this industry and to the bottom line, with damning questions to the Liberal leadership on this matter during parliament time.

And will Australian voters continue to turn a blind eye to people who are store blind and in need of having a reality check
Posted by Suebdootwo, Sunday, 12 February 2006 11:00:38 PM
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Histographies (Quigley, Toynbee) support the author. Concentrations of power with wealth often mean the ways of doing things exist beyond their use by date, because the powerful wish to maintain their position and the status quo. Ultimately, this approach proves counter productive and the society or civilization becomes non-adaptative.

When one thinks about merchants and traders have long been regarded bottom of the barrel cheats from the Merchant of Venice to the Chinese Shang, from the snake oil saleman to the AWB. Related, traders, politicians and pioneers have brought out the worse side of society.

Like the US, Australia should enact laws holding its citizens and residents must act in accordance with domestic laws, even internationally.
Posted by Oliver, Monday, 13 February 2006 12:34:19 PM
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I am constantly amazed by politicians and their use of "Mock Indignation & "Mock Anger" as a tactic on important issues like the AWB wheat saga.

The Cole Commission is the right place to hear the evidence at this stage... not a Senate estimates committee although it appears from today's evidence that there is still a lot of evidence to come out.

The Govt prevents public service staff testifying at the Senate hearing and the Labor Senators go ballistic and yet when they did a similar thing in 1989 (John Howard's justification of precedent) I believe the Liberals went ballistic at that time. At least this time I guess there is a formal enquiry in place.

It's amazing how politicians can change their opinion on process when they get power. Most have probably forgotten Core & non Core promises. Is the Govt using plausible deniability? - Were their staff or any other public servants ever told not to tell the Senior Management or the Ministers?

The Labor Party should keep probing and gaining as much extra evidence as they can ... it is their job as an opposition but can they lay off the mock indignation, it's been done to death. We voters can't tell when they are truly upset or when they are acting, as politicians use the ploy so often.

The single desk policy sells 75% of Aussie wheat. It is a good system that has given Australia an advantage over the rest of the world. There is no need to change it, but we probably will because of the AWB's alleged actions.

Now a costly delegation is being sent to undo the mess ... I wish them success especially because the wheat farmers don't deserve what is unfolding.

Will the wheat farmers have a claim against the Directors and Management of the AWB for a breach of fiduciary duty if this case is proven?
Posted by Opinionated2, Wednesday, 15 February 2006 8:22:29 PM
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I find it hard to believe that anyone could seriously argue the position that because the single desk AWB may have engaged in 'unethical' business practices (cute term eh?) that a market dominated by fully private companies would not.

This is simply ideology. Isn't just as logical that such companies would simply compete to see who could offer the largest 'incentives'?

At the same time I am always amazed that politicians and business leaders continue to make their problems worse by denying any wrongful practice. They would probably have done themselves much less damage by simply admitting that they did it and offering the excuse that 'it was the only way to ensure a successful outcome'. By hitting the denial and cover up buttons as a first response to such issues they do far more damage not just to their own credibility but to the industry they purport to serve as well.
Posted by defender, Thursday, 16 February 2006 5:54:40 PM
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