Fran O’Sullivan writes in The New Zealand Herald that, there is one salient comment in the report by Queens Counsel Miriam Dean into the WPC80 incident that ought to give Fonterra’s directors and shareholders cause for concern: “A company that is more focused on its own commercial reputation in a crisis does so at its peril. Companies should think about consumer safety first and reputation second. If consumers lose trust in a company, that will be its undoing.”
The inquiry into the “WPC80 incident: causes and responses” provides plenty of evidence that Fonterra broke this most basic rule for a food industry company leading up to and during the false botulism scare. Throughout the crisis – and the events that gave rise to it – the company was slow to put food safety as its priority because it did not have the appropriate culture.
It was instead focused on production and market share.
This aspect has to some extent been glossed over in the prior Fonterra management report and the review undertaken by the Fonterra board itself.
These reports have talked about a “silo mentality” and “Fortress Fonterra”.
But these are simply manifestations of the lack of clear communications platforms (and adherence to them) that existed at the food co-operative in August 2013 when the crisis emerged. It is not the fundamental issue.
What is more compelling is the fact that staff cut corners when they shouldn’t have; food traceability systems were lacking, the liaison with AgResearch over the tests of the suspect whey protein concentrate was a joke; the management and board did not meet their obligations to report the suspected contamination to the Ministry of Primary Industries within agreed deadlines; Fonterra went out to the market with wrong information about a customer’s products (Karicare) costing that company massive brand damage, and, did not apply a rigorous fact checking process before issuing communications.
Or as my friend Gary noted, good risk communicators are hard to find.