Fonterra says it knew nothing of Iraq bribes

Dairy giant Fonterra said today it could not be expected to know about any bribes paid by a Vietnamese company to Iraq under the United Nations oil-for-food programme.

A Government inquiry will investigate any links between Fonterra and the Vietnamese firm.

A Fonterra spokesman confirmed the co-op sold to VinaMilk and VinaFood.

But the spokesman said of any bribes paid: "I don't know how we could be expected to discover that."

The spokesman said Fonterra would investigate the situation in light of the latest concerns.

He said Fonterra sold product to many parties around the world who then took control of it.

In January 2000, Iraq Sanctions Medical Alert Group (ISMAG), a New Zealand lobby group opposed to the trade sanctions on Iraq, stated that "some people" in the political and official sphere did not want New Zealand to get involved in direct trading with Iraq and the "messy business' of oil for food.

ISMAG said there were significant tonnages of New Zealand dairy products entering the Iraqi market, after being sold to third-party countries "supplying evidence of nimble and alert dairy entrepreneurship".

The lobby group said in the paper, written for foreign affairs officials and MPs, that the Dairy Board – Fonterra's predecessor - estimated there was no reason why New Zealand could not sell up to $60 million worth of dairy products annually to Iraq "even under a sanctions regime".

"Dairy Board sources even suggest up to $100 million a year is not inconceivable," the report said.

It quoted the Dairy Board as saying: "We will trade without fear or favour until advised by the Government not to."

It recommended that the Ministry of Foreign Affairs and Trade should explain to New Zealand exporter all the intricacies of the sanctions regime and how lawful sales might still be made.

- nzpa