Fonterra’s whey protein inquiry gets underway, executive jobs lost

Posted by AFN Staff Writers on 19th August 2013

New Zealand based dairy manufacturer Fonterra has started an independent inquiry into the circumstances of “quality issues” with a whey protein concentrate (WPC80), which was found to contain the bacteria ‘Clostridium Botulinum’.

Meanwhile, Fonterra’s Managing Director of New Zealand Milk Products, Gary Romano, has resigned from his role and two senior managers have been placed on leave following the WPC80 issues.

MD NZ Milk Products resigns

Fonterra announced that Gary Romano had resigned from his role of Managing Director of New Zealand Milk Products, effective immediately.

Theo Spierings, Fonterra Chief Executive, will assume interim responsibility for the day-to-day operations of New Zealand Milk Products.

“Gary has made a significant contribution during his time at Fonterra and we respect his decision,” Mr Spierings said.

Two senior managers “placed on leave”

Fonterra has also announced that two senior managers have been placed on leave, effective immediately, as it continues its internal operational investigation into the circumstances surrounding the WPC80 recall.

“We are moving quickly and establishing key facts about what has happened and, as they emerge, we are taking appropriate action,” Mr Spierings said.

Mr Spierings said that placing the two managers on leave “did not pre-empt the findings of the operational review” and that they will continue to be involved in the ongoing investigation.

Fonterra said the internal operational review will be completed by the end of hte month and is looking into the transparency of information in the business, and how that information is escalated to the appropriate levels.

Separate independent inquiry continues

Meanwhile, Fonterra’s Board of Directors is continuing a separate inquiry and the findings from the operational review will be shared with them.

Fonterra said the Committee, which includes Inquiry Chairman and Fonterra Independent Director Sir Ralph Norris, held its first meeting last week and had confirmed the terms of reference for the Inquiry. The Fonterra Board also appointed Professor Stuart McCutcheon, Vice Chancellor of the University of Auckland, to the Inquiry Committee.

“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 of favour,” Sir Norris said.

Fonterra 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 endochrinology 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 the review, Fonterra confirmed that the WPC80 Inquiry Committee has also appointed an international expert on the manufacturing and safety of foods and food components. Jacob Heida, is an expert in whey production processes and standards for infant food ingredients and current member of the Discplinary Committee of the Netherlands Controlling Authority for Milk and Milk Products.

“With work now underway, the Committee is focused on a thorough and independent investigation into all relevant aspects of the WPC80 quality issue and will speak further about the findings of the inquiry when our deliberations are complete,” Sir Norris said.

Fonterra whey protein inquiry gets under way