Iraq suspends dealings with AWB

Iraq has suspended business dealings with Australia’s monopoly wheat exporter AWB, the company has said.

The suspension will remain in force until the completion of an inquiry into allegations that the firm paid bribes to the former regime of Saddam Hussein.

“AWB is disappointed by the decision,” said chairman Brendan Stewart.

The move means that AWB, which is the exclusive dealer for all Australian wheat overseas, is out of the running for a lucrative Iraq contact.

The firm’s share price plunged by 8% as a result of Monday’s news.

An Australian government inquiry is currently investigating claims that AWB paid more than $200m to Saddam Hussein’s regime, as part of the UN oil-for-food programme.

AWB denies any wrongdoing, with executives saying they were duped into believing that fees paid to Baghdad were meant to cover the costs of transporting grain.

But an earlier investigation by the UN said the firm should have known the money was going into the pockets of Iraqi ministers.

The allegations have provoked an uproar in Australia, with opposition claims that the government knew about the kickbacks – claims government ministers have denied.

Last week the company’s managing director, Andrew Lindberg, became the first person to resign over the issue.

AWB was the largest single supplier of humanitarian goods under the UN-sponsored oil-for-food programme in Iraq between 1996 and 2003, which allowed the Iraqis to sell oil and import food and medicine despite being under sanctions.

At the time AWB was the government wheat board, but it is now a privately listed company.

The inquiry now looks set to impede the success of Australian grain exports.

A bumper harvest of around 24 million tonnes of wheat is currently stored in silos, waiting to be shipped abroad.

Australia had hoped to win a contract recently tendered by the Iraq Grain Board for a million tonnes of wheat.

But Monday’s news effectively ends its hopes.