Are Fonterra’s ethics up to scratch?


NZ Farmers Weekly has an interview with Warren Leslie, the Dairy Board’s last chief executive, who said:

he would have “moved heaven and earth” to declare a product recall immediately he had information about poisoned milk.

He also said the Board had discussions with San Lu, in which Fonterra has a 43% stake, two years before Fonterra was created but they had other priorities.

“The whole arrangement in China needed to be very carefully thought through … if you don’t start with really good milk you can’t make the range of product we can here.

“The first thing you have to do is to try to get the standards raised. In any investment we might have made anywhere, we would have wanted to put our own people in, get our own standards in place and generally raise the bar,” Larsen said.

Does that mean the Dairy Board would not have been keen on a joint venture, or only invested in a majority shareholding?: “That would have been a matter for the board, but certainly from a management point of view the answer to that is yes.”

Larsen said his reaction to the SanLu crisis was “one of great sadness”.

“If you look at the chart of risk that most corporates use, the model we had had a big centrepiece and it in were the words ‘food safety’. Food safety is absolutely and utterly non-negotiable. Other risks are negotiable in business but if you are a food company your reputational risk, your brand equity is all on the line, and you do not put it at risk.”

So would Larsen, as Fonterra did, have initially settled for a quiet trade recall of Sanlu product, as advised by local Chinese government authorities? : “Like hell I would’ve.”

The NBR reports that former independent chairman of Fonterra’s disbanded ethics committee Dr Simon Longstaff also has concerns about the San Lu investment and said had the committee still been in place:

he was ‘almost certain’ it would ahve been involved from the outset in putting procedures in palce for setting up the joint venture with San Lu . .

Dr Longstaff is now the executive director of the St James Ethics Centre in Sydney. He said ethical considerations for Fonterra include:

* the “health and safety of the consumers of these products” – though Dr Longstaff accepts it’s extremely difficult to try to protect consumers against malicious conduct of others.

* Concerns for the welfare of Fonterra, and its capacity to generate wealth for New Zealand.

* The duty of a really significant New Zealand company not jsut to look after the singular interests of its farmers but also to recognise that whatever it does has the capacity to affect New Zealand’s reputation; and

* Whether the board or senior management have maintained a capacity to deal with these ethical issues in a complex world which “refuses to be tamed by our ignorance”.

“Most ethical questions are not good versus bd, right vbersus wrong – it’s competing interests all being [weighed],” Dr Lognstaff said. “The thing about making good decisions – it’s not jsut a matter of common sense. It requires engagement, confidence and you’ve got to care. If anyone in the company was involved in a decision which sought to place the interest of the company or its partners in China ahead of the children, then that in my mind would be fudnamentally wrong. A betrayal of the ideals of New Zealand.”

I don’t believe that Fonterra deliberately put commercial interests ahead of children’s lives. But I do wonder if the company had all the information it needed before it went into partnership with Sanlu; and the delay between its representatives on the board discovering there was a problem with melamine poisoning in the milk and the public recall indicates major deficiencies in its procedures for dealing with serious quality issues.

Inquiring Mind comments on and links to the NBR article here.

There may be a reasonable explanation


as to why an Otara shop owner was arrested and charged after he was stabbed during a fight outside his shop.

But it’s not immediately obvious.

Keeping Stock, and The Hive share my confusion.

Keeping waterways clean


A report by Fish and Game and Forest and Bird concludes that the Dairy and Clean Streams Accord:

 has failed to achieve its major goal to reduce the impact of dairying on the quality of New Zealand’s streams, rivers, lakes, goundwater and wetlands.

Susie McKeague, Otago Regional Council  manager of land resources said that in South and West Otago there was a declining trend in ammonia as a result of fencing and planting along waterways, the Clutha River was clean because the volume of water diluted contaminants but water quality in small streams and tributaries was deteriorating.

She put this down to intensive farming on wet soils. Fencing and planting along waterways to keep animals away from them helps prevent run off, but dung and urine move through the soil structure and leach into waterways. One solution to this would be more use of feed pads, particularly in winter when it rained more, so that animals weren’t on the paddocks when they were soaked.

North Otago waterways are cleaner than those further south and Susie put this down to a drier climate and the Environmental Farm Plans which are a requirement for every farm which gets water from the North Otago Irrigation Company.

“The EFPs are the best choice for environmental protection and they are driving good practice more than anything in other areas,” she said.

Susie said that it would be impossible to protect waterways from pollution during floods but at other times it was necessary to capture everything on farm or have remedies if more nutrients than desirable leached into water.

“For example, if phosphorus makes algae grow then we need something to reduce any concentration of phosphorus.”

Susie believes that the best way to solve any problems is to tell farmers what the issues are and leave them to find solutions.

“They have the best ideas to achieve what’s needed. Farmers are switched on, well networked and they know how to find answers.

“EFPs are making a difference in areas we didn’t anticipate and are leading change. Farmers are monitoring soil moisture, irrigation scheduling and effluent disposal and have a real desire to get it right.”

Coke contraceptive research wins Ig Nobel Award


This year’s Ig Nobel Awards went to research which found Coca Cola is a spermicide and another project which found it isn’t a contraceptive.

Deborah Anderson had heard the urban legends about the contraceptive effectiveness of Coca-Cola products for years. So she and her colleagues decided to put the soft drink to the test. In the lab, that is.

For discovering that, yes indeed, Coke was a spermicide, Anderson and her team are among this year’s winners of the Ig Nobel prize, the annual award given by the Annals of Improbable Research magazine to oddball but often surprisingly practical scientific achievements.

. . . Anderson, a professor of obstetrics and gynecology at Boston University’s School of Medicine, and her colleagues found that not only was Coca-Cola a spermicide, but that Diet Coke for some reason worked best. Their study appeared in the New England Journal of Medicine in 1985.

“We’re thrilled to win an Ig Nobel, because the study was somewhat of a parody in the first place,” Anderson said, adding she does not recommend using Coke for birth control purposes.

A group of Taiwanese doctors were honoured for a similar study that found Coca-Cola and other soft drinks were not effective contraceptives. Anderson said the studies used different methodology.

A Coca-Cola spokeswoman refused comment on the Ig Nobel awards.

Other awards went to a study which found price makes a difference to the effectiveness of fake medicines; that crunchier crisps taste better; and that exotic dancers earn more when they’re most fertile.

You can read more details of those projects by following the link at the top of the post.

The full list of prize winners is here.

Buy bigger block for Christmas


Fonterra will lower the price of dairy products on the domestic market by Christmas because of falling international prices.

If the bigger block of chedder doesn’t seem quite right for a present and you want to go up market there’s always Whitestone Cheese’s  gift boxes or their tins of Windsor Blue.

It’s hard to let go


Three strikes and . . .?


First there was the accusation that Attonrey General Michael Cullen let us down  over the EFA.

Second there was the accusation that he misled cabinet. over the Canadian attempt to buy Auckland Airport.

Now we have a third accusation that he’s using dodgy figures on Trans Tasman wage comparisons against Treasury advice.

That’s three strikes today but we’ve got five weeks until we can rule him out – and then only if enough voters see the light.



This Friday’s poem is James K Baxter’s Farmhand from New Zealand Farm & Station Verse, published by Whitcombe & Tombs.

It was written several decades ago but the difficulty facing young rural men looking for love may even be worse now.

There are more women in the country in what were once regarded as male occupations, including vets, stock agents and fertiliser reps, but not enough to compensate for the loss of rural schools and businesses which used to bring young women to the country.

Expectations have changed too so young women are probably less willing to sacrifice their careers for love and life on a farm than their mothers might have been.

Rural communities have come up with several innovative ways to counter the lack of women, the most well known of which is probably the Middlemarch’s biennial singles ball. 



You will see him light a cigarette

At the hall door, careless, leaning his back

Against the wall, or telling some new joke

To a friend, or looking out into the secret night.


But always his eyes turn

To the dance floor and the girls drifting like flowers

Before the music that tears

Slowly in his mind an old wound open.


His red, sunburnt face and hairy hands

Were not made for dancing or love-making

But rather the earth wave breaking

To the plough, and crops slow-growing as his mind,


He has no girl to run her fingers through

His sandy hair, and giggle at his side

When Sunday couples walk. Instead

He has his awkward hopes, his envious dreams to yarn to.


But ah in harvest watch him

Forking stooks, effortless and strong –

Or listening like a lover to the song,

Clear, without fault, of a new tractor engine.


                – James K. Baxter –

AG let us down over EFA


Auckland University law professor Bill Hodge says the Attorney General failed to protect our right to free expression by upholding the Electoral Finance Act.

Is this failing because the AG is not a lawyer? Or is there something more here because this is the second criticism of Michael Cullen today.

The Hive points to the front page lead by Ben Thomas in today’s National Business Review which says Cullen misled Cabinet over the Canadian airport deal.

Somehow Thomas has e-mails that show that Dr Cullen refused to allow Treasury officials to consult the Ministry of Foreign Affairs and Trade on the legal implications of any moves to block the sale of airport shares in preparing its advice. As a result, Treasury, who are not expert in this field, gave incorrect advice to Government.

Did someone say the election is about trust?

Cover up corrosive


The States Services Commssion report on immigration  found then head of the service head Mary Anne Thompson,’s family got special treatment.

The inquiry by the State Services Commission is highly critical of Mary Anne Thompson’s bosses and the department for failing to act appropriately when staff tried to raise concerns.

By keeping the matter hidden, they had created doubt and a loss of trust among immigration staff, to the extent that it was having “significantly corrosive effects”.

Labour Department chief executive Christopher Blake said:

“I want to take this opportunity to reiterate that the behaviour described in the report is completely unacceptable to me. As the SSC report indicates, the problems were caused at leadership level, but I am confident that we are making changes to improve our business and prevent a similar situation happening again.”

It’s almost impossible to have policies and procedures that can’t be circumvented by people in the know, but if safeguards in thw system work properly any breaches ought to be picked up quickly and dealt with appropriately.

Obviously the checks and balances were faulty before but this report ought to ensure they’re working properly now.

Keeping Stock  also looks at the SSC report.

Update: The report is on line here  and Kiwiblog posts on it here.

Update 2: The Inquiring Mind posts his 21st and 22nd updates on the immigration scandal.

Just one more donation?


Winston Peters has found a $40,000 donation which must have slipped his mind when he made his last return for the register of pecuniary interests.

Keeping Stock wonders what Helen Clark will do now she’s faced with yet another black mark against her Minister with Baubles but No Work.

Will it matter to her that as Kiwiblog  points out, the money almost certainly came from the Vela family which has big interests in racing – the portfolio held by Peters and to which extra taxpayers’ money has been given under his watch?

Will she wonder if a donation of $40,000 slipped his mind whether anything else of importance has too? Or will she think that it didn’t slip his mind  at all, and that it was a deliberate failure by him to make an honest declaration?

Update: Roarprawn posts on this here  and suggests the PM owes the SFO an apology here.

Baa codes for Icebreaker


Icebreaker is asking the high country farmers who supply it with merino wool to tell their stories to customers.

Iconic merino clothing company Icebreaker has enlisted its back country wool suppliers to give its international customers an idea of what they are wearing.

Now selling in 24 countries, the Wellington-based company’s new range of garments include individual “baa-codes” which, when typed into the company’s website, take customers to where the wool originated from.

The website points out farm locations and includes comments or a video from the farmers about themselves or their operation.

I wear up to four layers of Icebreaker merino clothing in the depths of winter and found an Icebreaker tee shirt just as useful in the heat of a Spanish summer.

I don’t need a baa-code  to convince me how good it is. But I can understand what a great marketing tool it could be for those not already hooked on it because the stories from the merino growers and the country they live and work in will add to the charm of the clothes.

Hospice welcomes Nat’s plan


It’s just a couple of months since the Otago Community Hopsice  was relying on fund raising to prevent it having to close four beds in the face of a $300,000 deficit.

Chief executive Ginny Green says National’s plan to increase funding for hospices  could boost their finances by around $500,000.

In a box of hurt


Only Jim Hopkins  could put Tony Brown, goats’ knees and Wall Street in the same column, and make sense.

And don’t you love the phrase, “box of hurt”?

36 more sleeps . . .


. . . until election day and the fair weather Finance Minister thinks $121 million is small change.

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