Are Fonterra’s ethics up to scratch?

October 3, 2008

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

October 3, 2008

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

October 3, 2008

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

October 3, 2008

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

October 3, 2008

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

October 3, 2008


Three strikes and . . .?

October 3, 2008

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.


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