Victim Impact Statement – Maury Leyland, Fonterra Managing Director of
People, Culture and Safety.
Overview:
I am employed by the Fonterra Co-operative Group Limited as the Managing Director of
People, Culture and Safety.
Fonterra is New Zealand’s largest company with annual revenue of around $20 billion.
We are a multinational dairy co-operative owned by 10,500 New Zealand dairy farmers
and the world’s leading exporter of dairy products, responsible for approximately 30% of
the world’s dairy exports. We maintain the highest standards of food safety and quality
and our products are consumed around the world.
We employ over 20,000 staff globally, with around 12,000 staff in New Zealand.
The blackmail threat letter containing deadly quantities of sodium fluoroacetate (1080)
mixed with milk powder sent by the accused to our CEO Theo Spierings in November
2014, was of huge concern.
It was a direct threat to our company, our farmers’ incomes and the New Zealand
economy. More importantly it was a terrible threat to cause grievous harm to babies and
children around the world – the most vulnerable members of our society.
This made it very serious on a business level, but also on a personal level as of course
many of our people involved in our response are parents.
These realities drove our response from the start – putting in place stringent security
and testing measures to protect people first, and to defend our business.
Response
On behalf of our CEO, I have been fully engaged in the subsequent Police investigation
known as Operation Concord and the ‘whole of government’ response to the blackmail
threat.
We immediately set in place a range of additional measures to ensure the safety of milk
products from the farm to the consumer, both domestically and internationally. Market
confidence in the integrity of Fonterra and other New Zealand based dairy product
producers is pivotal in maintaining and improving New Zealand’s global reputation for
high quality dairy products.
We, Fonterra, took immediate steps to lock down our supply chain and increase product
testing to provide assurances to customers and consumers that all of our milk and
products were safe and the quality remained unaffected.
A serious threat to contaminate milk formula products such as this strikes at the heart of
our business as we have significant interests in infant and other formula businesses,
including:
•

An established infant formula brand in China and other Asian markets

•
A strategic partnership with, one of China’s leading dairy companies, focused on
the supply of high quality infant formula into China

 •

Export of milk powders to more than 100 countries worldwide

New Zealand’s economy is heavily reliant on the dairy industry and by way of example,
in 2014 New Zealand exported in excess of NZ$14 billion worth of infant formula, cheese
and milk products worldwide.
Attributable cost summary
The cost of our response to this blackmail threat is estimated at more than $20 million.
The majority of this cost is due to the additional testing programme and security
measures we implemented in response to the threat.
Major steps taken which are covered in our cost estimate include:
•
Implementing a national security upgrade programme across our manufacturing
sites in the months following the threat
•
Establishing an ongoing testing programme of raw milk and finished product to
confirm the safety of our products and to meet additional Overseas Market Access
Requirements (OMAR). This included capital investment in new equipment and method
development.
•
Our people working an estimated 9,500 hours on the overall industry response. A
core group of 30 worked full-time while another 150 were involved in varying capacities.
•
Engaging subject matter experts to review our security measures, independent
legal advice and undertaking a review of information databases.
Additional impacts
In addition to directly attributable costs, we contributed to the New Zealand Government
response in many ways, offering all our support and resources available.
Specifically:
•
Significantly assisting the development of end-to-end value chain vulnerability
assessments and associated risk assessment workshops, noting that this was used as
the basis for:
o
Ours and the New Zealand Government’s response, action and mitigation
plan and strategy
•
The establishment of the Government-led Food Defence working group and
workshops which were held at a national level with key dairy manufacturing groups
within New Zealand, and the retail segment
•

Shaping capital requirements at a national level

•
Supporting the development and implementation of the raw milk and finished
product testing programme for 1080 which resulted in the establishment of the Sampling
and Testing Industry Working Group. This group assessed current and future testing
requirements related to the 1080 contamination threat and determined current and ongoing requirements to support regulatory risk assessment activity
•
Fonterra raw milk and finished product testing data was used by Fonterra and the
New Zealand Government to demonstrate that product offerings supplied by Fonterra,

 and subsequently by New Zealand, did not contain 1080 within the limit of reporting.
This process involved the recovery and testing of six months’ worth of retention samples.
•
Fonterra employees and our data supported the New Zealand Government’s
engagement with the Chinese government, which resulted in the establishment of the
China country entry requirements (OMAR); and
•
Fonterra supported the transition of this programme into the National Chemical
Contaminants Programme (NCCP).
From an impact on our people perspective, it should be noted that:
•
A number of Fonterra employees and contractors came into contact with the
letter and accompanying deadly dose of 1080. This caused alarm for them and their
families. In addition they were required to undergo fingerprinting, DNA testing and
Police interviews as part of the Operation Concord process which added to their levels of
anxiety
•
A full incident response structure was established to manage the impact of the
threat, encompassing ten core work streams. The time commitment of these work
streams varied from part to full time, and was dependent on the focus and urgency of
the work required. This had a negative impact on our business-as-usual activities and
saw projects and work delayed
•
Members of the response structure were also required to delay or re-organise
planned holidays, Christmas and New Year breaks, and undertake unplanned
international travel that further interrupted their professional and personal lives.
It should also be noted that as a result of the 1080 threat we have modified the
following practices:
•

Increasing tanker security measures

•

Testing for 1080 in all paediatric products; and

•
Established and appointed a Group Security Manager to oversee full review and
implementation of a global security strategy, including global threat assessments.
Conclusion
It is important to remember what a catastrophic impact this blackmail threat could have
had on the lives of innocent children. While the words of the letter carried terrible
threats, it cannot be forgotten that it was accompanied by a deadly quantity of 1080
mixed with milk powder.
It’s hard to imagine a worse threat to children and families, or to the viability of our Cooperative, the wider dairy industry and the country. Exports of New Zealand’s number
one product – dairy – could have been severely impacted with markets closed around
the world.
This threat had a very real emotional and financial cost on Fonterra’s people and our
business. And as Fonterra’s Response Director I would like to acknowledge the time and
commitment of our people who worked incredibly long hours under immense pressure
over several months to deal with the threat.

 I also am immensely proud of not only Fonterra’s response, but also New Zealand’s
wider response leading to the arrest and guilty plea of the accused.
This case serves as an example of how well New Zealand can work together to protect
children and families, and overcome adversity.
Co-operation and collaboration supported the whole of government approach, and meant
that there was ultimately a good outcome to this terrible situation.