Wheat transportation costs rose in Saddam Hussein's Iraq because AWB was delivering in a war-torn country, a former employee says.
Nigel Edmonds-Wilson is the first witness in the ASIC civil case against two former AWB executives accused of overseeing the improper payment of $US223 million during the Iraqi dictator's regime.
When asked in the Victorian Supreme Court on Tuesday about a price hike in inland transportation costs in 2001, Mr Edmonds-Wilson, formerly part of its international sales and marketing unit, said that had not really been explained.
"I don't specifically recall anybody explaining it other than the understanding that Iraq was a difficult market and the fact that the AWB was delivering to all governances in a war zone environment," Mr Edmonds-Wilson said.
ASIC has accused the AWB of inflating contracts with the Iraqi Grain Board under the UN oil-for-food program by disguised inland transportation and after-sale service fees.
Mr Edmonds-Wilson said while he charged a specific amount for transportation costs, he did not know how that cost was established.
ASIC has accused former AWB chair Trevor James Flugge and group manager trading Peter Anthony Geary of overseeing the improper payment of trucking and after-sales service fees into Iraq, in breach of UN sanctions.
Supreme Court Justice Ross Robson gave counsel for Mr Flugge and Mr Geary the opportunity to make an opening statement for their clients on Tuesday, but both parties asked to set this aside for a future date.
ASIC claims the Australian wheat exporter simply closed its eyes and paid kickbacks designed to get around UN sanctions on trade with Iraq.
It told the court AWB paid $US223 million in so-called inland transportation and after-sales service fees between July 1999 and March 2002.
In a statement, Mr Flugge said he fervently believed, as he had from day one, that he had done nothing wrong.
The trial, which started last week, is expected to run for 10 weeks.
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