The inquiry team has reviewed Fonterra’s performance 18 months after its 33 recommendations were made.
The team was headed by Queen’s Counsel Jack Hodder, who said it had taken very seriously its responsibility to form an independent assessment.
“To avoid any doubt, we record that we have had full co-operation from Fonterra personnel and that no-one has sought to inhibit our work or the development of our conclusions.”
The team visited several plants to review a wide range of documents and did confidential interviews with more than 60 people.
They included directors, senior management, other Fonterra employees, farmer and institutional shareholders, government officials and MPs, primary industry analysts, journalists and others.
The team made its first report, which Fonterra directors decided to make public, in October 2013.
The review found 10 “primary things that went wrong”, perhaps the most salient being the errors of judgment in whey protein concentrate processing and the inadequate testing for suspected Colstridium botulinum.
There was delayed escalation of the “explosive reputational risk involved” and failure to join the dots between botulinum, infant food products, consumer sensitivities and Fonterra’s global reputation.
The 33 recommendations related to operational matters, governance and some specific matters including clostridial testing and crisis planning and management.
The review found Fonterra had made improvements in all areas subject to the recommendations and had incorporated them into standard and sustainable business practices.
Food safety and quality understandings and procedures had improved, scientific and diagnostic matters had been revised and refined, crisis management arrangements, including traceability and escalation procedures, had been effectively overhauled and regular crisis simulations were held.
Internal communications were now more open and digital and social media capability had improved.
“Silos” in the company had been eroded with an effective “one company” approach.
Fonterra had made fundamental changes but they were seen as part of a journey, which no one claimed was complete.
Because it was an “involuntary national champion” Fonterra attracted a constant political and media focus.
The review was done when milk prices were very low but senior management and the board had continued to make food safety and quality primary matters.
The review said relevant areas had received appropriate, careful attention.
The work of the team was done under the oversight of a committee chaired by Sir Ralph Norris, as one of his last acts as an independent director before resignation later this month.
“Important, constructive and apparently well-entrenched changes have been made within Fonterra in those areas identified as less than satisfactory in the 2013 report,” he said on behalf of the oversight committee.
