KEY POINTS:
Fonterra, the world's biggest dairy trader, says it is not counting the financial impact the poisoning of over 6000 babies in China has had on the hundreds of millions of dollars it has invested there.
Fonterra had been struggling to do the right thing and focusing on the health of the children, the cooperative's chief executive Andrew Ferrier told a press conference in Auckland.
Three children have died, and 6244 babies had fallen ill, 158 suffering from acute kidney failure, after apparently being fed infant formula contaminated with melamine made by Chinese companies, including Fonterra's joint venture company, San Lu.
"Fonterra wants to do whatever it can to help the situation in China," Mr Ferrier said.
"Right now, we understand the Chinese government has stepped in and is looking after the health of the children.
"We will see ... if there's something else we can do."
Asked if he was ruling out compensation for parents of the sick children, Mr Ferrier said the cooperative had to find out how the Chinese system worked and do what it could to help.
Repeatedly questioned about the six-week delay in going public with its August 2 knowledge of the poisoned milk, Mr Ferrier said Fonterra had to decide the most effective way to get the product off the shelf.
Executives decided they would have more influence if they worked inside the Chinese system.
"Standing outside the system, we could not see where we could have an appropriate influence in getting the product off the shelf," he said.
A trade recall removed product from stores, supermarkets and distribution centres.
In reply to a question that while this was going on children were falling sick, Mr Ferrier said: "Every day, the question was what's the most effective way to do it?
"We had no assurances that if we had tried to work outside the system that it would have had any effect at all."
Fonterra owns 43 per cent of San Lu. Mr Ferrier said what had happened was a criminal act.
"Sabotage, you can call it what you want. It's a criminal contamination.
"This is an ethical issue. We're not even counting the cost, just doing the right thing.
"We worked with San Lu to aggressively improve quality control."
The chairman of San Lu has resigned over the scandal.
Mr Ferrier said San Lu's testing on the toxic milk powder had not initally revealed any problems.
"I wish it got escalated sooner. There were six levels of testing in three different provinces by three different agencies," Mr Ferrier said.
Chinese officials said today that about 20 per cent of the dairy companies tested nationwide had sold products tainted with melamine.
Suppliers to the companies are thought to have added the banned chemical, normally used in plastics, to raw milk to make the milk appear higher in protein.
The companies included Mengniu Dairy, China's biggest milk company, which said today it was recalling its baby formula after government tests found melamine in the product.
Health Minister Chen Zhu told a televised news conference that 6,244 babies had been sickened after being feed tainted milk formula, and that 158 were suffering from acute kidney failure.
The General Administration of Quality Supervision, Inspection and Quarantine had already reported that its inspectors had found melamine "in 69 batches of milk powder manufactured by 22 companies".
- NZPA, AP
