Fonterra offers relief, but no reassurance

WELLINGTON -- New Zealand is a lucky country, more so than some of its citizens might appreciate.

Some New Zealand business people might bemoan the size of its market, but for those in tourism and the country's burgeoning food industry, the wide empty spaces and relatively small urban and industrial footprints are something to celebrate.

This gives the country its clean, green reputation, which enables companies like Fonterra to charge a premium on their products abroad.

It adds value of "trust and reliability " that transcends price for consumers overseas.

A few lucky countries can claim such premiums on their merchandise: Germany's precision engineered vehicles, certain French wines.

That is why the finding that the Fonterra's "botulism scare" was in fact a false alert has sparked so much relief, but not so much reassurance.

Fonterra's recall of the affected whey protein concentrate was commendable in putting public safety before all other considerations -- but one is left with a sense of frustration that a better regulated industry could have avoided such a crisis.

No industry will ever be flawless, but export markets have a right to expect that a premium product will have been tested and retested to at least ensure 99-percent reliability before it reaches their shores.

New Zealand has benefited admirably from its reputation and its government is openly intent on making it the food bowl of the Asia- Pacific region.

It remains to be seen whether it can achieve this without sacrificing the country's clean, green reputation -- which gives New Zealand food its value -- while it opens up more areas to exploration of minerals and oil and gas, eases development regulation against the advice of its own environment commissioner, and promotes the intensification of farming.

The 2008 melamine scandal, a tragedy for those worst affected was a punishing lesson for both China and Fonterra of the need for rigorous regulation to protect not just consumers, but also industries from themselves.

It created a new global sensitivity to food safety.

Fonterra is a fundamentally trustworthy company as demonstrated in June when it refused to collect milk from new "landfarms" pasture areas created from the treated drilling waste of the oil and gas industry. Whether the drilling waste affected the milk of cattle from those farms is still under debate, but Fonterra decided to avoid the risk at least to its reputation.

Since the "botulism scare," the New Zealand Ministry for Primary Industries has pledged to step up regulatory oversight in dairy plants until other investigations are completed.

The most authoritative of these investigations is expected to be the ministerial inquiry.

The world will be watching when this inquiry makes its report.

How the government responds will be an indication of its values.