Hon Nathan Guy
Minister for Primary Industries
Hon Nikki Kaye
Minister for Food Safety

19 August 2013 Media Statement

Details of Joint Ministerial Inquiry into whey protein contamination

Primary Industries Minister Nathan Guy and Food Safety Minister Nikki Kaye have today released the draft terms of inquiry for the Government’s investigation into the whey protein concentrate contamination (WPC) incident.

“The Government has agreed in principle to establish a joint Ministerial-led Government Inquiry which will be divided into two parts,” says Mr Guy.

“Part A will look at how the potentially contaminated whey protein concentrate entered the New Zealand and international market, and how this was subsequently addressed.

“Parts B and C will look at regulatory and best practice requirements against the background of this incident in relation to the dairy industry, including the response of regulators. The inquiry will then report back on any recommended legal, regulatory or operational changes.

“This will provide the answers needed to the questions that have been raised about this incident, both domestically and internationally. It is also an important step in reassuring our trading partners that we take these issues seriously,” says Mr Guy

The Ministers have invited Miriam Dean QC to chair the inquiry. Ms Dean is the past president of the Bar Association, a former partner at Russell McVeagh, and has held a range of board appointments.

Two other members will also be appointed shortly, one of whom will be an international food safety expert.

The details of the Ministerial inquiry, including the appointment process, are ‘in principle’ because it’s proposed that the inquiry will be carried out using powers in the Inquiries Bill currently before the House.

“I think it is important in terms of independence that we have an international expert on food safety and systems as part of the inquiry,” Ms Kaye says.

“Parts B and C of the inquiry have an interim report back time of three months after the inquiry panel has been formally established.

“This report back will feed into the work plan I already have underway to look at areas where we can strengthen our food systems, which includes infant formula assurance work.

“I have also written to the chair of the Primary Production Select Committee to ask that consideration of the Food Bill be put on hold pending this part of the inquiry into regulatory and best practice requirements,” Ms Kaye says.

The inquiry is in addition to those already announced by the Ministry for Primary Industries and Fonterra.

Attached: Draft terms of reference for the Government Inquiry into whey protein concentrate contamination incident 2013. [see below]

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Miriam Dean CNZM QC

Miriam Dean has extensive governance and commercial litigation experience. A former partner at Russell McVeagh, she is a barrister sole whose practice focuses on commercial, competition and consumer law, arbitration and mediation.

She is a past president of the New Zealand Bar Association and a member of the Auckland Transition Authority before being appointed a company director of Auckland Council Investments Limited, one of the new Auckland Council controlled organisations managing the Council's investments portfolio.

She is currently Chair of New Zealand On Air and Chair of the Banking Ombudsman Scheme. She is also a director of Crown Fibre Holdings, the Government's investment vehicle responsible for managing the introduction of ultra-fast broadband to urban areas.

She was made Queen’s Counsel in 2004 and was previously a member of the Government’s Electricity Review, Civil Aviation Authority and the IANZ Council. She was also the lead reviewer of the Crown law Office review.

Ms Dean was recently awarded a New Years Honour for services to the law and business.

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Draft Terms of Reference for Government Inquiry

Government Inquiry into whey protein concentrate contamination incident 2013

Background

New Zealand has a reputation as a credible and trusted supplier of safe and suitable food to both domestic and international markets. This well-deserved reputation is a vital element in the continuing growth and productivity of the food industry.

Exporting food is critical to New Zealand’s economy, with the food industry making up half of New Zealand’s merchandise export value. New Zealand has an excellent track record of exporting safe food, and our food safety system is considered world-leading.

The whey protein concentrate (WPC) contamination incident risks damaging the reputation we have worked hard to gain.

This Government Inquiry is about strengthening an already strong system, to ensure that New Zealand food products retain their status as among the world’s safest and most desired.

Appointment and order of reference

This Inquiry will inquire into and report (making any recommendation that you think fit) upon the following:

Inquiry into how the potentially contaminated whey protein concentrate entered the New Zealand and international market, and how this was subsequently addressed

a) In relation to this incident of potential contamination of whey protein concentrate at Fonterra’s Hautapu plant in 2012:

i. The causes of this incident;

ii. The practices used at each stage, from sourcing the raw material to products containing the whey protein concentrate entering the market; and

iii. The timeline of steps taken by Fonterra, and any other party, with regard to testing and reporting the potential contamination of whey protein concentrate; and

iv. The implementation of contingency plans for food safety incidents by Fonterra: and

v. Fonterra’s history as a significant manufacturer and exporter of safe dairy products.

This part of the Inquiry will not be undertaken until the MPI compliance investigation is completed, subject to any views the Inquiry reaches on the application of [clause 16] of the [new Inquiries legislation].

This part of the Inquiry will rely on findings of fact from the MPI compliance investigation and supplement this as required.

Inquiry into regulatory and best practice requirements

b) The requirements of any Acts, regulations, or other laws, or of any recognised practices, that govern the following aspects of food safety against the background of this incident in relation to the dairy industry, including how those legal and practice requirements interact with each other:

i. Quality and integrity of diagnostic testing; and

ii. Traceability requirements, including the requirements across the supply chain to retailers; and

iii. Reporting and risk management decision-making; and

iv. Implementation of food safety standards; and

v. Contingency plans for food safety and food quality; and

vi. Response of regulators, including any recognised agency; and

vii. Potentially affected products, including infant formula.

c) How the matters referred to in paragraphs(b)( i). to (vi). above compare with similar matters in other comparable jurisdictions; and

Matters upon or for which recommendations required

The Inquiry will report on and make any recommendations it considers fit on –

a) The adequacy of legal and best practice requirements with regard to diagnostics, traceability, reporting, implementation of food safety standards, contingency planning and response of regulators (refer to paragraph (b)(i) –(vi) and paragraph (c) above); and

b) Any legal or regulatory changes or additions necessary or desirable to prevent or minimise similar incidents; and

c) Any changes or additions to operational practices for diagnostics, traceability, reporting, implementation of food safety standards, contingency planning and response of regulators, to address the lessons from this incident.

Exclusions from inquiry and scope of recommendations

The Inquiry is not to inquire into, determine, or report in an interim or final way, or otherwise prejudice any of the following matters:

(a) The Ministry for Primary Industries’ investigation into the compliance with any legal or practice requirements;

(b) Whether any questions of liability arise; and

(c) The legislative structure of the New Zealand dairy industry.

Definitions

‘Practice’ or ‘practices’ includes, without limitation, each of the following:

(a) Decision-making;

(b) Procedures;

(c) Processes;

(d) Services;

(e) Systems.

Reporting sequence

The Inquiry is to report findings and opinions, together with recommendations, required and otherwise, that you think fit to make in respect of them, to the appointing Minister(s) in writing in the following sequence:

(a) Inquiry into regulatory and best practice requirements;

i. An interim report is to be provided by no later than three months after notification of the Government Inquiry in the Gazette

ii. A final report is to be provided at a date to be specified by the appointing Minister(s), following the conclusion of the MPI investigation and any subsequent court action

(b) Inquiry into how the potentially contaminated whey protein concentrate entered the New Zealand and international market, and how this was subsequently addressed, at a date to be specified by the appointing Minister(s), following the conclusion of the MPI investigation and any subsequent court action.

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