Fonterra inquiry needs teeth

The government is dusting off a bill that has been languishing on Parliament’s order paper for four years in order to give the inquiry into the debacle over Fonterra’s whey protein concentrate more teeth:

It will rush the Inquiries Bill through its remaining stages within the next three weeks and is considering using urgency to pass it.

The problem ministers face is that current law gives them two options – a commission of inquiry which would take at least a year and a ministerial inquiry which doesn’t have the power to subpoena witnesses and obtain documents.

The bill allows a third type of inquiry to be held, called a Government inquiry, which is effectively a ministerial inquiry with teeth. . .

A toothless inquiry would do more harm than good.

The inquiry also needs to be both fast and thorough.

Prime Minister John Key wants an inquiry that can quickly find out why Fonterra’s whey protein was contaminated and how the company handled the crisis.

He clearly believes it should have the power to compel witnesses to appear and to seize documents if that’s needed. . .

Fonterra is doing its own investigation and the Ministry for Primary Industries (MPI) has begun a compliance investigation into the debacle.

“I have said a number of times since MPI was first notified on Friday August 2 of this issue, that we have a number of questions about it, including when relevant parties were informed, and when they should have been informed,” MPI acting Director-General Scott Gallacher said.

“This compliance investigation will determine whether regulatory requirements under the Food Act and the Animal Products Act were met by all parties involved, or whether any parties may have committed any breaches or offences.

“The investigation will include decisions made by all parties and their response, including during production of the whey protein concentrate, and from when anomalies in testing initially arose. It will be led by MPI’s Director of Compliance, and will involve upwards of 20 people,” Mr Gallacher said.

“MPI will continue to provide operational updates on other matters relating to the potential contamination of whey protein concentrate, but it cannot comment any further on the compliance investigation until it is completed. It is likely to take three to six months,” Mr Gallacher said.

Maximum penalties for breaching regulations under the Food and Animal Products Acts range from $100,000 to $500,000, and/or up to 12 months imprisonment, depending on the nature of the offence.

MPI will also undertake a formal debrief process on its own response to the incident, to identify any lessons learned.

This isn’t just Fonterra’s problem.

It has impacted on other exporters and threatens to tarnish the country’s reputation for high quality, safe food.

We need to find out what happened and how it happened.

We also need to find out what needs to change to prevent it happening again and how any future food safety issues can be handled much better.

2 Responses to Fonterra inquiry needs teeth

  1. Disagree entirely on this one Ele. We don’t need an inquiry. Fonterra governance should be nothing to do with government. What’s needed to provide rigour to Fonterra – per my current blog post – is to take away their statutory monopoly and put them into a true free market.


  2. homepaddock says:

    If this was only about Fonterra’s governance and management I’d agree with you. The threat to other companies and exports justify a government inquiry.


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