NZ premier promises tough inquiry into Fonterra scare

New Zealand Prime Minister John Key announced Monday that the government is to set up a ministerial inquiry into the Fonterra botulism scare to allay consumer fears in China.

Key told a press conference that the government would also rush through legislation to enable the inquiry to subpoena witnesses, Radio New Zealand reported.

Key, who is planning to travel to China to discuss the scare, said he hoped the ministerial report would be completed by the end of the year.

Fonterra revealed on Aug. 3 that 38 tonnes of its whey protein was contaminated in May last year with a bacterium that could cause botulism. The whey protein was shipped to customers in New Zealand and abroad before the contamination was announced publicly.

Key said he would announce full details of the inquiry on Aug. 19 and then pass the law within two weeks.

Earlier Monday, Key told Television New Zealand that the government inquiry could possibly include a Chinese representative.

"One possibility is that if we can find an eminent Chinese scientist with a specialization in this area we may well put them on because it would hopefully give them more confidence in their market," Key said.

The Ministry for Primary Industries (MPI) said Monday it had begun an investigation into whether Fonterra complied with its regulatory obligations in informing the authorities of the contamination, which is believed to occurred in May last year.

"I have said a number of times since MPI was first notified on Friday, Aug. 2, of this issue, that we have a number of questions about it, including when relevant parties were informed, and when they should have been informed," MPI acting director-general Scott Gallacher said in a statement.

"This compliance investigation will determine whether regulatory requirements under the Food Act and the Animal Products Act were met by all parties involved, or whether any parties may have committed any breaches or offences," he said.

"The investigation will include decisions made by all parties and their response, including during production of the whey protein concentrate, and from when anomalies in testing initially arose."

The probe, which could involve a team of up to 20 people, would likely be completed in three to six months.

Maximum penalties for breaching regulations under the Food and Animal Products Acts ranged from 100,000 to 500,000 NZ dollars (80, 438 to 402,188 U.S. dollars), and up to 12 months imprisonment, depending on the nature of the offence.

Fonterra Chairman John Wilson also announced that the company's board had set up an inquiry committee charged with overseeing an independent review into how the contamination occurred and the subsequent chain of events.

A retired New Zealand High Court judge had been appointed to the committee as an independent member and an eminent scientist would also be appointed, he said.