New Zealand: Food contamination: the Fonterra inquiry commences

Last Updated: 7 October 2013

A Government inquiry into the whey protein concentrate contamination incident (the Fonterra Inquiry) has commenced. The Fonterra Inquiry will be carried out under the new Inquiries Act that came into force on 27 August 2013 after being fast-tracked through its second and third readings following the Fonterra incident.

The Fonterra Inquiry

The purpose of the Fonterra Inquiry is to strengthen New Zealand's food safety system to protect New Zealand's reputation in the food industry. The Fonterra Inquiry is split into three parts:

  • What happened: Part A will inquire into and report on how the potentially contaminated whey protein concentrate entered the New Zealand and international market, and how this was subsequently addressed. This part of the Fonterra Inquiry will only commence once the compliance investigation by the Ministry for Primary Industries (the MPI Investigation) is completed.
  • Regulatory and Best Practice Requirements: Part B will inquire into and report on the regulatory and other best practice requirements that govern food safety standards for the New Zealand dairy industry, including product testing, traceability, reporting, risk management and the role of regulators.
  • International Standards: Part C will assess how New Zealand's regulatory and best practice requirements compare with standards in comparable jurisdictions.

The Fonterra Inquiry will prepare an interim report on Parts B and C within three months. This interim report will recommend legal and regulatory changes to prevent or minimise similar incidents in future, as well as changes to operational practice in light of the lessons learned. A final report will follow in parts after the conclusion of the MPI Investigation and any subsequent court action.

The Inquiries Act 2013

The Inquires Act 2013 (the Act) is intended to reform and modernise the law relating to Royal commissions of inquiry, commissions of inquiry and non-statutory ministerial inquiries. Its purpose is to enable inquiries to be carried out more effectively, efficiently and fairly, while ensuring that those participating in an inquiry are adequately protected.

Under the new Act, there are three types of inquiries – Royal commissions, public inquiries and government inquiries. The key differences are in their manner of appointment and reporting. In summary:

  • Royal commissions: Royal commissions of inquiry are established under letters patent and are the highest level of public inquiry for matters of significant public concern. A recent example is the Royal Commission into the Pike River Coal Mine Tragedy.
  • Public Inquiries: Public inquiries are established by the Governor General for the purpose of inquiring into complex matters of public importance, but are intended for matters that do not warrant a full Royal commission of inquiry. A reasonably recent example is the Commission of Inquiry into the Collapse of the Viewing Platform at Cave Creek
  • Government Inquiries: Government inquiries are the lowest tier of inquiry under the Inquiries Act and are intended to provide a more flexible form of statutory inquiry. They will likely be used by Ministers for less complex, discrete issues that require a relatively quicker but still authoritative answer. Government inquiries are established by, and report to, Ministers.

While inquiries required by Ministers are nothing new, ministerial inquiries have until now had no legal status and no statutory powers. There have been numerous ministerial inquiries over the years investigating issues ranging from Novopay, alleged misconduct of MPs, and the Auckland power crisis in 1998. Their lack of legal status has raised issues about the power to compel witnesses and obtain relevant evidence, as well as the confidentiality of information obtained and the privacy of witnesses.

Government inquiries will take the place of ministerial inquiries and will have the same powers to obtain evidence and summon witnesses as a Royal commission or a public inquiry. Participants in Government inquiries will also have the same immunities and privileges as if they were participating in a Royal commission or other public inquiry.

What this means for the Fonterra Inquiry

The Fonterra Inquiry is a Government inquiry. The Act was fast-tracked to enable the inquiry to be carried out quickly with powers and privileges to maximise efficiency and fact-finding ability. With these new powers and privileges, it is hoped that the Fonterra Inquiry will be better equipped to obtain and protect evidence and witnesses than recent ministerial inquiries such as the GCSB inquiry.

The Fonterra Inquiry will not inquire into or report on the MPI Investigation, questions of liability or the legislative structure of the New Zealand dairy industry. The MPI investigation is directly relevant to Fonterra and its public perception, criticism and potential liability, but the Fonterra Inquiry may also lead to changes in the legislative and regulatory framework and require improvements in operational practice.

Any recommendations that the Fonterra Inquiry makes could have far reaching implications for the food industry. All players in the industry need to be aware that there may be a tightening up of the regulations governing food safety standards and in particular product testing, traceability, risk management, reporting and contingency, and a potentially larger role for regulators.

To discuss the relevance of the Fonterra Inquiry and the new Inquiries Act to you, or for advice on public law matters, please contact a member of the Public Law team

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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