Organised crime behind tainted milk, PM told

Organised crime interests were behind the Chinese tainted milk scandal which resulted in the death of at least four infants, a previously confidential briefing paper to Prime Minister Helen Clark suggests.

The paper was written by the Ministry of Foreign Affairs for Miss Clark and faxed to her home on September 5, triggering New Zealand Government action which eventually led to the scandal becoming public several days later.

The briefing painted a picture of high-level concerns that the emerging food scandal could harm New Zealand's interests.

It gave ministers the option of agreeing to the NZ Embassy making contact with Chinese authorities - action that was taken.

"The Chinese milk supply has been targeted by Chinese organised crime, which has been adding as a byproduct of the chemical industry, melamine, to raw milk supplied to processing plants," the paper said.

"The harmful impact on consumers, particularly Chinese infants who are the most at-risk group, is the most serious concern," the paper said.

The ministry clearly warned that the issue was likely to become public knowledge at some point and urged appropriate action from ministers, while noting action should be taken in a way that "minimises the risks to New Zealand's reputation and interests".

Tainted milk left tens of thousands of infants ill and at least four dead in China.

Giant dairy producer Fonterra was implicated as 43% owner of milk powder producer Sanlu.

Miss Clark has previously indicated she was disturbed enough by what she read in the briefing paper that quick action was taken.

The document has been released to the Weekend Herald under the Official Information Act, although large chunks of the report had been deleted.

Among the deleted sections was one on New Zealand's "international responsibilities", while another missing piece covered the response by Chinese authorities to Fonterra's concerns about the milk.

However, part of the paper indicates tension between Fonterra and Chinese authorities.

"Fonterra advises that by mid-September all of the adulterated product should have been accounted for or consumed," the paper told the Government.

"This suggests that despite the authorities' reticence to support a full product recall, Sanlu/Fonterra have managed to achieve a similar outcome through a variety of other methods."

The ministry provided Miss Clark and other ministers with suggested "defensive talking points" to use if the issue became public and they were asked about it.

Miss Clark appears to have largely ignored the suggested answers to questions, choosing instead in the days after the scandal broke to say her Government blew the whistle on it.

Miss Clark also said early on that local authorities in China would not allow an official recall - something missing from Mfat's advice.

Last night, Fonterra chief executive Andrew Ferrier said discussions continuing around its joint venture, "include the possibility of Sanlu being acquired by a third party."

Mr Ferrier was commenting on Chinese media reports that Sanlu, into which New Zealand dairy farmers have invested nearly $200 million, was facing bankruptcy.

- The New Zealand Herald/NZPA


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