Australia's former monopoly wheat exporter, the Australian Wheat Board, said yesterday that it would ''vigorously defend its position'' if an Iraqi Government lawsuit against it went ahead.
The Iraqi Government is suing dozens of international companies, including the AWB, for more than $10 billion, saying they paid kickbacks to former Iraqi leader Saddam Hussein's government under the United Nations oil-for-food program.
The civil lawsuit, filed in US federal court in Manhattan, seeks to recover damages from companies investigated by a UN-commissioned inquiry, claiming they cheated the Iraqi people out of benefits of the $67 billion UN program.
Foreign Minister Stephen Smith's office declined last night to comment on the legal action against the AWB, saying that it was ''a private legal matter''.
Opposition Leader Brendan Nelson also declined to comment on the case.
A 2006 royal commission headed by Justice Terrance Cole found the AWB paid more than $220 million in kickbacks to Saddam's regime for wheat sales.
As shadow foreign minister and then opposition leader, Prime Minister Kevin Rudd was a trenchant critic of the AWB and the Howard government's handling of allegations surrounding the wheat board's involvement in the oil-for-food program.
From 1996 to 2003, the UN's oil-for-food program operated to help Iraqis cope with UN sanctions after Iraq invaded Kuwait in 1990. The program allowed Iraq to sell oil in order to buy humanitarian goods.
The lawsuit says billions of dollars were lost, ''all of which were directly translatable into food, medicine and other humanitarian goods that were supposed to reach the Iraqi people''.
But a UN-commissioned inquiry headed by former US Federal Reserve chairman Paul Volcker found the program was corrupted by 2200 companies from 66 countries that paid $1.8 billion in kickbacks to Iraqi officials to win supply deals.
''The corruption of the United Nations oil-for-food program has been described as the largest financial fraud in human history, but its impact on the people of Iraq went far beyond financial loss,'' the lawsuit reads.
''The corruption of the [program] affected the very lives and health of the Iraqi people.''
Other companies named in the lawsuit include European bank BNP Paribas, drug makers GlaxoSmithKline and Roche Holding, and units of drug company Schering-Plough, as well as several units of Switzerland's engineering company ABB Group.
Another vigorous critic of the AWB, Liberal senator Bill Heffernan, said yesterday that the wheat board would have to face the consequences of its actions and that the UN also had much to answer for.
''The UN is as much to blame as anyone else; the UN was very corrupt in its processes in the Iraqi oil-for-food issue,'' Senator Heffernan told ABC radio.
with AAP