NZ companies 'in clear' in oil-for-food scandal

No evidence has been found that New Zealand companies were involved in bribes associated with the United Nations Oil for Food programme to Iraq, Foreign Minister Winston Peters said today.

Two New Zealand companies were named as part of the wide ranging Volcker Report that investigated illicit fund transfers involved with the aid programme.

It also emerged that dairy giant Fonterra had exported products to Vietnam and bribes were then paid by another company when those goods were re-exported to Iraq.

However, Mr Peters said it appeared all the New Zealand companies had acted properly and there needed to be "significant further information" to pursue a prosecution under bribery laws.

"An extensive file search by Ministry of Foreign Affairs and Trade officials has found that the two New Zealand companies referred to in the Volcker report, JB Sales Ltd and Ecroyd Beekeeping Supplies Ltd, acted in accordance with UN and New Zealand rules," Mr Peters said.

"The Volcker report also cites a Vietnamese company, Vietnam Dairy Products. The company was a major customer of Fonterra, and is understood to have repackaged and onsold whole milk powder to Iraq.

"However, MFAT's file checks reveal no evidence that Fonterra was involved in, or had any knowledge of, any illicit payments to the former Iraqi Government, nor does the Volcker Report suggest that this was the case."

The report named more than 2000 companies around the world that were involved in bribery and corruption when exporting to Iraq.

Mr Peters said the two companies named in the report had sought and received the proper approvals under the UN sanctions regime and New Zealand law to export to Iraq.

Ecroyd Beekeeping supplies told MFAT officials in 2002 that they had been asked to pay an extra 10 per cent tax, they had been advised the payment was illegal and they should refuse to pay it.

The Volcker report has acknowledged that the companies may not have been aware of illicit payments, Mr Peters said.

- NZPA