Rt Hon Winston Peters
Minister of Foreign Affairs

04 November 2005
Media Release

Oil for Food: No Evidence of NZ Corporate Wrongdoing

Checks of official records have found no evidence of illicit funds transfer by two New Zealand companies referred to in the Volcker inquiry into the UN Oil for Food Programme, Foreign Minister Winston Peters said today.

"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. This 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.

"I asked MFAT officials to check their records after the Volcker Report listed the two New Zealand firms among more than 2,000 companies that supplied product to Iraq and allegedly made illicit fund transfers to the Iraqi regime.

"JB Sales and Ecroyd sought and received the proper approvals and exemptions required under the UN sanctions regime and New Zealand law to export to Iraq.

"One of the companies (Ecroyd) told MFAT officials in 2002 that they had been asked to pay an additional 10% tax. After consulting with the UN, MFAT informed the company that this was illegal and they should refuse to pay it.

"Therefore, significant further information would be needed from the Independent Inquiry to establish whether there were any grounds to pursue a prosecution against either of these two companies under New Zealand's anti bribery laws. Volcker himself acknowledges that companies may not have been aware of illicit payments," Mr Peters said.

ENDS

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