Fonterra adds expertise to inquiry panel

15/08/2013

Fonterra has added more expertise to the panel inquiring in to the contaminated whey protein concentrate.

An independent inquiry into the circumstances of quality issues with a whey protein concentrate (WPC80), announced by Fonterra’s Board early this week, is now underway.

Inquiry Chairman and Fonterra Independent Director Sir Ralph Norris said the first Inquiry Committee meeting held yesterday had confirmed terms of reference for the Inquiry and noted the appointment by the Fonterra Board of a further independent member – Professor Stuart McCutcheon, Vice Chancellor of the University of Auckland – who will join the Committee, effective immediately.

“Professor McCutcheon is a respected New Zealander whose independence, strong credentials as a scientist, and governance experience will further ensure the Inquiry is conducted at the right level and addresses the right questions without fear or favour,” Sir Ralph said.

Professor McCutcheon holds a PhD, has completed post-doctoral work as a Harkness fellow at Cornell University and published extensively in the fields of endocrinology and metabolic physiology. He is a previous Director of the New Zealand Dairy Research Institute, the Malaghan Institute of Medical Research and is presently Chair of the Universities New Zealand Research Committee.

Professor McCutcheon joins retired High Court Judge Dame Judith Potter as the two independent members on the committee, alongside five Fonterra Directors, and Chapman Tripp QC, Jack Hodder, who is undertaking a review of events for the committee.

To assist with technical aspects of this review the WPC80 Inquiry Committee has also confirmed the appointment of an international expert on the manufacturing and safety of foods and food components. He is Jacob Heida, an expert in whey production processes and standards for infant food ingredients and current member of the Disciplinary Committee of the Netherlands Controlling Authority for Milk and Milk Products. . .

This is a high-powered and well qualified group and it needs to be to reassure shareholders, customers and the public.

The inquiry is expected to take about six weeks.


Fonterra inquiry team includes external members

12/08/2013

Fonterra’s inquiry into the whey protein concentrate contamination will include two people from outside the company.

Today Fonterra Chairman John Wilson announced that Fonterra’s Board has established the WPC80 Inquiry Committee, and charged them to oversee an independent review into the circumstances giving rise to the affected whey protein concentrate (WPC80) and subsequent chain of events.

Mr Wilson said he had complete confidence that Fonterra’s CEO, Theo Spierings, had made the right decisions and is continuing to do everything to manage this complex issue, but that there are serious lessons that need to be learnt.

“It is critical that we identify these lessons quickly so our farmers, governments, customers, consumers and unit holders can again have full confidence in Fonterra and its products.

“With this in mind, the Board has confirmed the Committee will be chaired by Independent Director, Sir Ralph Norris, and will include two external independent members who are not Fonterra board members.”

The Committee is comprised of:
·         Sir Ralph Norris (chair) – Independent Director
·         Simon Israel – Independent Director
·         Dame Judith Potter – External Independent Member
·         Blue Read – Farmer Elected Director
·         Nicola Shadbolt – Farmer Elected Director
·         John Waller – Independent Director

An eminent and respected scientist will also be appointed to the Committee over the coming days as the second independent member.

Commenting specifically on Dame Judith Potter, a retired High Court judge and fellow of the New Zealand Institute of Directors, Mr Wilson said that her appointment to the Committee demonstrates the Co-operative’s commitment to a full and independent inquiry.

“Dame Judith brings with her a breadth of legal, judicial and board experience, and a reputation for being decisive and commercially astute.”

The Committee has appointed Jack Hodder, QC of Chapman Tripp, to undertake the review into the events leading up to and following the WPC80 concerns. Mr Hodder will  report back  to the Committee.

As part of this, Mr Hodder will have access to all necessary independent experts and advisers, and the WPC80 Inquiry Committee is currently seeking an internationally recognised industry expert on the manufacturing and safety of foods to work alongside Mr Hodder.

“The inquiry will start immediately and it is the Board’s intention to have it completed within six weeks. However, the emphasis will be on a full and thorough investigation.

“The Board has given the Committee a far-reaching remit. It will not only review the circumstances and principle decision points relating to the affected WPC80 product, it will also look more broadly at Fonterra’s business procedures, systems and practices,” Mr Wilson said.

Two well qualified external members, three independent directors and two farmer elected ones provide a good mix for the committee.

A full inquiry into not just the contamination and how it was handled but the broader view of the company’s procedures, systems and practices is necessary to find out exactly what went wrong and why it was so badly handled.

Only then will the company be able to improve what it does and how it does it and from that foundation rebuild its reputation.


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