Do you think companies affected by Fonterra's botulism scare should be compensated?
A cocktail of lapses and issues led to the fiasco around Fonterra's false botulism alarm, a company review has found.
Fonterra's internal inquiry into last month's scare revealed the precautionary recall was "the right thing to do" even though there was only a "minute risk" to the public, the co-operative's chief executive Theo Spierings said this afternoon.
"An operational review found a small piece of plastic in batches of whey protein concentrate led to a reprocessing at the Hautapu plant, where "non-standard" equipment was used and it was exposed to high levels of clostridium bacteria."
The reprocessing involved a non-standard piece of equipment - a transfer pipe which was the likely cause of contamination - which has since been decommissioned, Fonterra group director of strategy Maury Leyland told a press conference. The equipment was used because of recommissioning elsewhere in the business.
An information-sharing lapse within the company led to a delay in further testing processes, Leyland said.
The review also found the issue should be have been elevated to chief executive level much sooner.
Fonterra has since created a new role in response to the lack of communication to upper management.
Compounding the string of issues was a delay in product-tracing processes in Australia, Leyland said.
"The precautionary recall was not the result of one event. It was a result of separate and unrelated events, that were all unforeseen," Spierings said.
He said that Fonterra was still the envy of all other dairy producers, despite the botulism scare.
Spierings admitted the decision to get AgResearch on board, which he said happened in June, was the moment that he wished he had been notified, if not earlier when there were raised levels of the strain's family bacterial group.
The operational review did not cover employment issues, so no decision had been made on two employees who were put on leave, earlier in the scare.
The Fonterra operational review was one of four investigations launched last month.
A ministerial-led government inquiry has still to report on its findings into circumstances around the contamination scare and how it was handled, as is a special investigation instigated by Fonterra's board of directors.
A Ministry for Primary Industries investigation concluded last week after overseas tests showed bacteria identified in 38 tonnes of whey protein made at the Hautapu plant were not capable of causing botulism.
Fonterra has been strongly criticised for onselling the product, made last year, when it had been identified in March as being potentially contaminated with some sort of bacteria.
The time between the March identification, which led to extensive testing by Fonterra, and the August 2 warning is also under scrutiny, as are Fonterra's testing and disclosure processes.
SOME IMPROVEMENT NEEDED
The false botulism scare stress-tested all Fonterra's quality systems and testing regimes, and some needed to improve, company chairman John Wilson says.
In an email to the dairy giant's 10,500 farmer-shareholders, he said the company acted quickly to understand what happened and why, and to do what was necessary to prevent a repeat of the incident.
Although Fonterra had clearly established domestic and international product-recall systems, the size and complexity of the whey protein concentrate recall was a factor, particularly given the product had itself become an ingredient in the products of several customers.
Wilson said Fonterra was making changes based on the lessons learnt from the review, including establishing the new role of group director of food safety and quality reporting directly to the chief executive, strengthening the remit and scope of the "food integrity council", and launching an internal food safety and quality hotline for staff and contractors for any concerns about potential food-safety risks.
Quality audits had been completed at sensitive nutritional plants, including Hautapu in Waikato, Wilson said.
Comprehensive staff training on the use of an upgraded computer to efficiently trace products across the entire supply chain had been completed.
Other actions to follow involved a review of any upcoming system changes, strengthening crisis management capability and reviewing traceability systems in the global businesses, he said.
The company was introducing additional authorisation requirements for non-standard processing and testing, and conducting specialised audits of global manufacturing plants and product quality standards.
"Everything in our power is being done to rebuild absolute confidence in our processes and products, and to strengthen New Zealand's already strong food safety and quality system - and make Fonterra even stronger for the future," Wilson said.