Quality control

New Zealand PM says milk scandal hushed up for weeks

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Helen Clark: We blew the whistle

Sanlu, the company behind the melamine tainted milk scandal is partly owned by New Zealand dairy giant Fonterra. Yesterday Radio New Zealand reported:

Fonterra chief executive Andrew Ferrier told a media conference on Monday afternoon that Fonterra and the Sanlu Group, which is 43% owned by the co-operative, had rigorous testing procedures but it was impossible to exclude sabotage of a product.

Mr Ferrier says investigations so far have ruled out contamination from the production, storage and sales process, but he says it appears the raw milk which Sanlu buys from a third party has been contaminated...

...Earlier, Prime Minister Helen Clark said New Zealand officials had to go to the Chinese government to get action over the contaminated formula.

An article by Jamil Anderlini and Peter Smith in The Financial Times makes the accusation more explicit, leading with this paragraph:

Chinese officials knew for weeks about sales of chemical-tainted milk powder that has killed two infants and sickened 1,253, but did not act until the New Zealand government pressed Beijing, New Zealand's prime minister said yesterday.

Can you imagine the dilemma faced by the Hebei officials who knew about the milk problems as they emerged in the run-up and during the Olympic Games? To report or deal with the problem and cause a food scandal during the Games, or to hush it up and hope for the best?

Of course, a hush up was the chosen answer.

But what of the role Fonterra played? If they knew about the problems, why didn't they do something aside from pressure the New Zealand government to talk to the Chinese government?

The Financial Times gives the answer from Fronterra's chief executive:

Sanlu could not be reached for comment yesterday, but Mr Ferrier defended Fonterra's role, saying "as a minority shareholder [the company] had to continue to push Sanlu. Sanlu had to work with their own government to follow the procedures that they were given."

However, New Zealand's Green party said Fonterra should have gone public much earlier.

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There are currently 7 Comments for New Zealand PM says milk scandal hushed up for weeks.

Comments on New Zealand PM says milk scandal hushed up for weeks

the fact that NZ government exposed the scandal to save chinese children, not the chinese government, exudes sheer amount of irony.

"Mr Ferrier defended Fonterra's role, saying 'as a minority shareholder [the company] had to continue to push Sanlu. Sanlu had to work with their own government to follow the procedures that they were given.'

However, New Zealand's Green party said Fonterra should have gone public much earlier."

I find myself agreeing with the Greens. It's a tough throw for Fonterra, who no doubt don't want to alienate Chinese authorities or a major partner. But I think the math is simple: Baby formula injuring babies (or even having the potential to do so) is not something you can equivocate around. Duty-of-care alone suggests you open your mouth and take the business consequences.

Black marks all around.

Totally unbearable, "cover up" seemed to be a tradition of the some Chinese gov departments. especially regional governments. And enterprises learned this tradition.

Will, you're absolutely right, but Fonterra can hardly be accused of being a responsible company. A dairy cow consumes 70-odd litres of water a day, and yet Fonterra is producing dairy products in bone-dry drought-prone regions of both China and New Zealand. Hey, if the money's rolling in now (and unfortunately it is), who cares about the future sustainability of your industry or the environmental mess you're making? Oh, and Fonterra is fouling up New Zealand's water ways with the vast amounts of manure its dairy farms produce.

If Fonterra can't be trusted to act responsibly in its own country, it can't be trusted to look after babies in China.

This Kiwi hates Fonterra and hopes it quickly finds itself in a world of trouble.

When one side cares only about face and money, and foreign investors care only about money is this any surprise?

"Sanlu had to work with their own government to follow the procedures that they were given."

However, New Zealand's Green party said Fonterra should have gone public much earlier."
---Financial Times:

F procedure. Why is that an excuse to be greedy and irresponsible for 2 deaths and potentially many more to come. Say what you will about the crazy Green party folk but they kind of have a point here.

Hi Jeremy,

Fronterra? [Fixed. Thanks. -JM]

Also that's a photoshopped abomination of Helen Clark.

This is what an irresponsible government did. Probably the problem lies at the local government officials, who just care about the local economy and their own benefits. Sanlu Group was the No. 1 milk powder producer in China. Every year it can do a lot of contribution to the local economy.

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