|This article is outdated. (February 2010)|
The Cole Inquiry, formally the Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme was a Royal Commission set up by the Government of Australia in November 2005. Its purpose was to investigate "whether decisions, actions, conduct or payments by Australian companies mentioned in the Volcker Inquiry into the United Nations Oil-for-Food Programme breached any Federal, State or Territory law." The Volcker Inquiry was set up to investigate the systematic corruption of the Oil for Food program by Saddam Hussein.
The commission's five volume report was tabled in parliament on 27 November 2006
The Volcker Inquiry
The United Nations Independent Inquiry Committee was formed to investigate allegations of corruption and fraud in the UN Oil-for-Food Programme. Paul Volcker's report, released in October 2005, found that AWB was the biggest single source of kickbacks made to the Iraqi government. In exchange for trouble-free disembarkation of wheat purchased under the Oil for food program, AWB paid 'trucking charges' totaling A$300 million to Alia, a Jordanian trucking company. Volcker found that Alia kept a small percentage of the 'charges', and passed the remainder to the government of Saddam Hussein.
An accompanying statement released with the report by the Secretary-General of the United Nations, Kofi Annan requested that “national authorities take steps to prevent the recurrence of such practices in the future and that they take action, where appropriate, against companies falling within their jurisdiction.” 
Establishment of the Cole Inquiry
In response to Volcker's findings, the Australian Government established a Royal Commission to further investigate the claims raised by the UN report. By Letters Patent issued on 10 November 2005 the commission was asked to inquire into and report on:
(a) whether any decision, action, conduct, payment or writing of any of the three Australian companies mentioned in the Final Report (“Manipulation of the Oil-for-Food Programme by the Iraqi Regime”) of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme, or any person associated with one of those companies, might have constituted a breach of any law of the Commonwealth, a State or Territory; and
(b) if so, whether the question of criminal or other legal proceedings should be referred to the relevant Commonwealth, State or Territory agency. 
Commissioner and Counsel
The Royal Commissioner was the Honourable Terence Cole QC a former Judge of Appeal of the New South Wales Supreme Court. The Cole Inquiry was the second Royal Commission Cole had headed. The 2001-2003 Royal Commission is commonly referred to as the "Cole Royal Commission" hence to avoid confusion the 2005-06 Royal Commission is commonly referred to as the "Cole Inquiry".
The three Australian companies adversely mentioned in the UN report (AWB Limited, Alkaloids of Australia Pty Limited, and Rhine Ruhr Pty Ltd) were granted leave to be represented by counsel before the Royal Commission
Prior to the public hearings the commission held a series of closed hearings in December 2005 and January 2006. Some witnesses who were examined in the closed hearings also gave evidence in the public hearings.
The commission's public hearings commenced on 16 January 2006. During the first six weeks of public hearings evidence led by Agius and cross examination by him of witnesses brought out a series of revelations that showed the conduct of AWB Limited's executives and directors in a very poor light. Apart from interrupting assisting counsel's question to ask witnesses his own probing questions, Cole frequently made reproving comments about the behaviour and evidence of witnesses particularly those in responsible and often highly remunerative positions with AWB Limited and the Wheat Export Authority, who among other things frequently claimed memory loss, inability to locate diaries and notes and notoriously, in the case of former AWB Limited board chairman Trevor Flugge, hearing loss.
On 16 February 2006 Commissioner Cole invited broadcast media into the inquiry's hearing room to record an invitation to anyone with information about kickbacks or the Iraqi oil-for-food scandal to appear before his inquiry. Cole emphasised that this appeal applied to anyone saying: "I am extending a specific invitation to any Member of Parliament, any member of the media, any public servant, or any member of the public who believes that they have information relevant to this aspect of the inquiry to provide any such information to those assisting me". ( Broad Band Video Clip from ABC TV)
On 2 March 2006 counsel assisting, John Agius, threatened to serve search warrants on AWB Limited following claims of memory lapses and loss of documents by a former company manager, Andrew McConville. This was countered by counsel for AWB Limited who suggested that the search for documents by the company was being conducted in a rigorous manner and at considerable expense.
On 3 March 2006, Cole applied for the inquiry's terms of reference to be amended to extend the period of the inquiry for up to two months (i.e. from the end of March to May 2006). Prime Minister John Howard indicated the government's agreement to this request two days later.
Prime Minister John Howard was asked to write and submit a statement in regard to this matter, and was "cross examined" on 13 April for 53 minutes. Howard previously stated to the Sydney Morning Herald "If asked I will naturally be happy to appear." "I've said all along that this is an utterly transparent process, which is not protecting the Government, which is designed to get to the truth of this matter and I am more than happy to comply with the request made by the commission."
The Australian Federal police on 28 August 2009 decided to drop its investigation into the scandal, in which wheat exporter AWB was found to have been funding the Iraqi regime in breach of UN sanctions. It was found that it was not even clear that breaching a UN sanction is a criminal offence and a conviction "was not in the public interest". The decision means no former employee or director of AWB will face criminal charges, although an investigation by corporate watchdog ASIC continues.
The AFP announced that the decision to drop the investigation was made after a review of the evidence by senior barrister Paul Hastings QC, who declared the prospect of convictions was limited and "not in the public interest".
In 2009, The Australian reported "It has hardly been a secret that the AFP investigation was under-funded and under-resourced, and it received little co-operation from AWB, which sees itself as a new entity, with all staff associated with the corrupt dealings having left."
Mr Hastings told the AFP that in his opinion there was no reasonable prospect of a conviction. It was not even clear that breaching a UN sanction is a criminal offence. Federal police drop AWB investigation
- Cole, Terence. "Summary, recommendations and background". Report of the Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme. p. 197. Retrieved 10 March 2011.
- Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme - inquiry's website
- The commission's report
- Wheat Export Authority
- Royal Commissions Act 1902
- Independent Inquiry Committee into the Oil for Food Programme - Volker Inquiry website
- "More than a cuckold" - commentary by Caroline Overington in The Weekend Australian - 4 March 2006
- "This inquiry is only half the job" - commentary by barrister Richard Ackland in Sydney Morning Herald 14 April 2006
- "Deceit by the truckload" - in depth report on the Cole Inquiry and the evidence before it by David Marr and Marian Wilkinson in Sydney Morning Herald 14 April 2006 (Part 2)
- "Cash Crop Part One" - Four Corners Program 10 April 2006
- "Cash Crop Part Two" - Four Corners Program 17 April 2006
- "David Flint" - Opinion on the call to widen the Cole Inquiries Terms of Reference
- "Rebecca Weisser" - Opinion on the systemic failure of Australian Department of Foreign Affairs and Trade to prevent AWB's corrupt contracts.