Top Fonterra executive Maury Leyland is unquestionably sincere when she says the dairy juggernaut's botulism- bug scare was "at the extremely bad end" of the spectrum because it had parents fretting for their children's health.
Leyland, group director of strategy at chief executive Theo Spierings' top table, was on extended leave with a sick son when she agreed to lead an in-house search for operational reasons and lessons around the crisis, which turned out to be a false alarm.
The Auckland mum last week took the spotlight to present the findings of that review, which revealed what the health-and-safety sector would call a "swiss cheese" event.
Leyland explains that, very occasionally, holes in slices of swiss cheese will line up to allow something to get through.
In Fonterra's case, the cheese slices last year were a runaway piece of plastic; use of a non- standard pipe in an unusual whey reprocessing event at its Hautapu plant in Waikato; a lapse in information sharing between two parts of the business, and a computer systems upgrade.
Then no-one informed Spierings when it became clear in March this year that the whey had been potentially contaminated and it was time to get testing done for the arch- food nasty, Clostridium botulinum.
Out of this cocktail came Fonterra's public announcement of a botulism risk in 38 tonnes of whey ingredient which by now had been sold for use in baby formula, among other products.
The result was a public fiasco, panicked parents in New Zealand and overseas markets, including China, Fonterra's biggest market and already gun-shy from food- safety scares.
Fonterra, the world's biggest dairy exporter and New Zealand's biggest company, lost public confidence with its bumbling communications and lack of immediate clarification on what products might contain the bug.
European food giant Danone, whose Nutricia baby-food products were involved in the ensuing big product recall, is thought to be considering legal action against Fonterra for reputational damage and has not ruled out a bid for compensation.
As we all now know, the crisis was a false alarm. But it took the Government stepping in to order conclusive scientific tests overseas to prove that, leaving questions about Fonterra's testing regimes, systems and communication nous.
Two official Government inquiries and an independent probe ordered by the Fonterra board of directors are tasked with answering them.
Leyland, no stranger to doing reviews as an engineer, former Boston Consulting Group executive and with nine years under her belt in Fonterra, says the biggest challenge of the review was its tight deadline.
Spierings, who quickly accepted the resignation of Fonterra's top manufacturing man for New Zealand, Gary Romano, and sent two senior managers on gardening leave, had promised a result by the end of August.
(The two New Zealand Milk Product managers remain on leave until a separate Fonterra board inquiry decides their fate.)
"The review was intended to be forward-looking. We had to understand what happened and why," says Leyland.
"We were not tasked with a witch- hunt. We were tasked with identifying what we need to do to close the gaps."
Leyland says the aftermath of the botulism-risk announcement was unparalleled in her review experience and in its impact.
"We had an event where people were concerned aboutthe health of their children. That's at the extremely bad end."
So, can Fonterra now assure consumers it won't happen again?
"We can never say it won't happen again. We do believe actions we have taken - and will take - will reduce the risk massively."
The crisis started to unfold when a Hautapu operator alerted that a piece of plastic from the surroundings of a drier could not be found after processing.
The drier sucks in a lot of air while it's working, Leyland says.
Instead of downgrading the product or putting it aside, the decision was made to rehydrate or reprocess it - something that Hautapu, one of Fonterra's smaller plants, rarely does. Enter the use of the "non-standard" piece of equipment, since decommissioned.
"Obviously, in hindsight, we would have made a different decision," Leyland says. "The product did come out passing all its tests which it should have, but in hindsight . . . the two factors combined did elevate the risk."
Leyland says the event has had a "huge" impact on Fonterra staff morale.
"It's a very big event and a difficult time for the company."
Its discomfort is far from over.
Government ministers are continuing their stern line over the issue, with Prime Minister John Key greeting the Leyland review findings as "stage one of the enquiries" and "no great surprise" there were multiple causes.
Food Safety Minister Nikki Kaye says the review "is a start . . . There is still a compliance investigation and a Government inquiry to be completed. These will ensure that all questions around this issue are answered."
Kaye says the Government will soon announce details of its inquiry.
"I think New Zealanders can be confident there will be a robust, independent inquiry into the cause of this incident, the response and any lessons for our food-safety systems."
New Zealand's biggest science institute, AgResearch, is also grumpy at Fonterra's handling of the event.
When Government-ordered overseas tests last week confirmed the false alarm, Fonterra's Spierings seemed to be wanting to pin the blame on AgResearch for misleading it, and spurring Fonterra to sound the alarm.
AgResearch initially responded that it stood by its work, but this week defended itself in a statement, saying it had not confirmed the presence of botulism causing bacteria, but reported that its research had potentially detected it, and recommended further testing.
- © Fairfax NZ News
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