Fonterra director Sir Ralph Norris to lead board inquiry

Former Commonwealth Bank of Australia chief Sir Ralph Norris is to lead Fonterra Cooperative Group's board inquiry into the botulism contamination scare, helped by former High Court judge Judith Potter and Chapman Tripp lawyer Jack Hodder QC.

Sir Ralph, an independent director of Fonterra, will lead a committee of six that will look into the contamination of three batches of whey protein concentrate (WPC80) and the way it was handled, Fonterra chairman John Wilson said in a statement.

Mr Hodder will review events leading up to and following the discovery of the contamination and the committee is looking for "an internationally recognised industry expert on the manufacturing and safety of foods" to work with him, the company said. The inquiry will start immediately and is expected to take six weeks.

Alongside Norris and Potter, the committee is made up of independent directors Simon Israel and John Waller, and farmer-elected directors Blue Read and Nicola Shadbolt. The board inquiry is in addition to a management-level review by Fonterra and a government inquiry which is to be discussed at the Cabinet today.

Fonterra is still battling the fallout from the contamination scare, which it first announced just over a week ago, including the somewhat unusual position of China in officially criticising New Zealand's biggest exporter. The Economic and Commercial Councillor for the Chinese Embassy, Zhang Fan, told TV3's The Nation that "mistakes should not be repeated again and again."

"Three times and you are out," he told the TV show.

And the reputation of Fonterra's products took another international hit with Sri Lanka ordering it to recall two batches of milk powder it says may be contaminated with dicyandiamide (DCD), a nitrogen inhibitor that had been used on New Zealand pasture until it was found in milk products.

Fonterra has denied the products contained DCD though that hasn't stopped Sri Lankan media posting critical articles about the company and is products.

The contamination was confined to 38 metric tonnes of whey protein concentrate (WPC80) manufactured at Fonterra's Hautapu plant near Cambridge and first picked up at a plant in Australia. It was used in the manufacture of infant formula, juice and dairy beverages, yoghurt, body building powder, and animal stock food.

(BusinessDesk)