Handbook of Global Research and Practice in Corruption
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Handbook of Global Research and Practice in Corruption

Edited by Adam Graycar and Russell G. Smith

Corruption is a global phenomenon with costs estimated to be in the trillions of dollars. This source of original research and policy analysis deals with the most important concepts and empirical evidence in foreign corrupt practices globally.
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Chapter 6: Circumventing Sanctions Against Iraq in the Oil-for-Food Programme

Linda Courtenay Botterill


Linda Courtenay Botterill In her introduction to a recent book on corruption in international business, Eicher (2009a, p. 2) notes that ‘not all illegal behaviour is corrupt, and not all corrupt behaviour is illegal’. There is also a fine distinction between the unethical and the corrupt. This chapter discusses a case which highlights this definitional blurring. In 2005, the Australian monopoly grain exporter AWB Limited was identified in a UN inquiry as the worst offender in circumventing the very complex Oil-for-Food sanctions regime that had been put in place against the Iraqi regime of Saddam Hussein. Cooperation with Iraq’s requests to bypass sanctions was confined to a small group of company employees who went to considerable lengths to disguise their activities. The Australian legal system did not consider AWB Limited to have broken any Australian law, so in this sense the company did not operate illegally. The events described below became a national scandal and were largely regarded as unethical. However, the principal actors were arguably not corrupt as there is no evidence they profited personally from their activities and, until the kickbacks became public, there was no principal– agent problem as the company was not disadvantaged. When the events became public though the consequences for AWB Limited were profound. The revelation of AWB Limited’s involvement in sanctions-busting activities was a major political scandal in Australia and seemed to threaten to bring down key Cabinet Ministers as suggestions, never proved, were raised that the Government had been aware of AWB...

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