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Scandal in the Slaughterhouse

Scandal in the Slaughterhouse

Deregulation has arrived in New Zealand’s meat-processing plants. Industry insiders say consumers are now at greater risk of eating contaminated meat, and the economic consequences for the country could be disastrous.

This story first appeared in the March 2014 issue of Metro. Photo by Grant Maiden.

 

In a steel shed somewhere in the North Island, a stunned cow, rear legs still twitching, is rolled into the room and hoisted onto a hook, where its throat is cut and it is bled to death. The upside-down carcass then swings around the room, past a series of stations, where it is stripped of its hide, cut open, trimmed, beheaded and eviscerated. Nothing goes to waste.

The workers wear protective clothing. Some of the people in the room are meat inspectors, men and women employed by a government agency whose job is to enter these killing sheds and ensure the edible parts of the animal — the carcass and the heaped, wobbly viscera — are fit to eat and free from cancer, arthritis and, most common of all, shit.

Some plants have introduced a new inspection system: the companies, not the government, now employ the inspectors. The results are frightening.

For years, these inspectors have kept consumers safe from meat that could make them seriously ill, and maintained New Zealand’s reputation. But times are changing. In some plants, the government and meat-processing companies have introduced a new inspection system: the companies, not the government, now employ the inspectors.

The results — as revealed in an official report obtained exclusively by Metro, along with a whole lot more supporting evidence — are frightening.

The government says it is carrying out a “very measured” programme of modernisation. Opponents say it’s deregulation characterised by incompetence, intimidation and manipulation of data. If it continues, they believe, there’s a high risk of outbreaks of illness caused by contaminated New Zealand meat.

As for the economic consequences — they could be devastating. Our meat exports last year were worth $6.3 billion.

 

New Zealand’s 75 meat-processing plants are vast, noisy warehouses, laced with the smell of guts, blood and excrement. The largest, in the South Island, process mainly sheep and lambs, while the smaller North Island plants mostly handle beef.

Though some are independently run, most are owned by one of four big companies: Silver Fern Farms, Alliance, Anzco and the Talley’s subsidiary, Affco. Between them they disposed of 30 million animals in the past year. Most of the meat is exported, but some ends up in New Zealand shops.

It’s not the killing of the animals that’s causing the current controversy, but what happens to them afterwards. Once an animal has been killed, the carcass is cut open and the viscera — its internal organs — are removed. The carcass remains on its hook, attached to a long chain running through the plant. At the same time, the organs are placed on a conveyor belt of metal trays (or, in some cases, a set of wheelbarrows) that runs alongside the chain of carcasses. And it’s here that the delicate and crucial game of inspection begins.

The most common and potentially serious problem — faecal contamination. Shit on the meat.

In a typical large plant, four people do the initial inspection of the animal. Two look at the carcasses, as they pass by at a rate of eight per minute, and two look at the viscera. All four inspectors are searching for serious diseases such as cancer, as well as bumps and bruises, contamination (dirt, bits of wool, hide and hair) and — the most common and potentially serious problem — faecal contamination. Shit on the meat.

The inspectors use a combination of sight and touch (called palpitation), following a highly technical and internationally prescribed set of more than 30 procedures. They palpate the abdominal cavity, view the hocks, check the ischiatic lymph nodes and so on. They have only seven or eight seconds to examine each carcass, so they work at frantic speed.

If a carcass is judged free of diseases and defects, it continues along the chain to be graded, chilled and then cut up in the boning room. The viscera are, separately, sent down chutes to the offal room, where they are packaged up for market.

If an inspector sees a disease or defect, they tag the carcass and it gets diverted, like a train onto a siding, to the “detain rail”. Here, the offending sections are trimmed off by a labourer, the carcass is rechecked by a fifth inspector and it gets put back onto the main chain. In general, around one in five sheep and one in 20 cattle get sent to the detain rail, according to government figures. On some days, half of all stock may be detained, if it’s come from damp ground or the butchering has been especially bad.

 

Since 1998, the country’s 800 or so meat inspectors have been employed by state-owned enterprises — since 2007, it’s been a single SOE known as AsureQuality (AQ). The inspectors’ status as government employees is supposed to guarantee their independence. But AQ’s prime purpose, as with all SOEs, is “to operate as a successful business”, according to its annual report.

“AsureQuality has significant market share in New Zealand,” the report adds, “and will continue to defend and extend its position by becoming even more customer-centric and solutions focused to exceed its customers’ expectations.”

Those “customers” include the very companies AsureQuality is supposed to be inspecting. AQ makes its money — $160 million in revenue in the past financial year — by offering services, including training, lab testing and food forensics, to meat-processing firms and other companies.

Until late last year, AQ’s head of operations was Kelvan Smith, a former meat inspector. (Smith left for a position with another organisation after our interview with him.) He told Metro he rejects any suggestion of commercial bias. Inspectors, he says, “are not involved in this commercial element with the meat companies and dairy companies. [And] as management, we have no ability to influence individuals in what they do.”

Smith did acknowledge that AQ’s commercial SOE status is “unique”: in other countries, meat inspection is done by a core government department. At AQ, Smith says, “we don’t regard ourselves as the regulator.” Technically, this is correct: the Ministry for Primary Industries (MPI), which has a vet in every plant as a final check on standards, is the designated regulator.

But this still seems an odd arrangement to people like Ian Baldick, a former meat inspector with 47 years’ experience in the industry, some of it as an organiser for the Public Service Association (PSA), which represents most meat inspectors. Baldick says he is speaking out now on behalf of inspectors who will not go public themselves for fear of losing their jobs.

Even the current system is flawed, Baldick says, because of AsureQuality’s reliance on meat companies for revenue and because the entity supposedly upholding the regulations does not see itself as a regulator.

But the new approach worries him even more.

 

Ian Baldick says New Zealand’s meat industry has long wanted to take much of the meat inspection off the government’s hands. The work was separated from the then Ministry of Agriculture and Forestry in 1998 because, as Smith acknowledges, “it was thought that meat inspection would be opened up to competition”.

The belief was that most of what inspectors looked for is related not to food safety but quality and appearance issues — minor defects, small bits of wool on the carcass, and so on — that posed no danger to consumers. So meat companies should be able to employ their own inspectors to check for these supposedly “non-food-safety-related” issues, while food-safety issues — serious diseases, in other words — would remain the province of government inspectors.

The new system was not implemented under the last Labour-led government, but after the National-led government came to power in 2008, the idea was revived. Five plants around the country now use it and more are likely to follow.

Carol Barnao, deputy director-general of standards at the MPI, told Metro that New Zealand needs to “modernise” its inspection, as other countries around the world are doing. When asked why, she said: “You should ask the companies that.”

Shit is a huge problem in processing plants. Often, when the animals are being butchered, the large intestine is nicked or burst.

Two of the four big companies, Alliance and Anzco, refused our request for comment. But Silver Fern Farms operations manager Wayne Shaw was happy to talk. He says it makes “philosophical” sense for companies to control quality issues, as well as there being “a cost advantage”. When the companies employ their own inspectors, they can shift them — at times when there is little inspection to do — onto other tasks, rather than paying for AsureQuality staff to sit idle.

At Affco, Rowan Ogg, the firm’s operations manager, also feels the advantages are clear. In addition to saving money, the new system puts more responsibility on his staff, so they are motivated to do a better job. “Rather than just saying, here are the elements that are enforced by somebody else, we say, here are our standards that we are responsible for and adhere to.”

Neither man would put a figure on the savings. Carol Barnao at the ministry says it’s “a little too soon” to know if the new system is cheaper overall. Kelvan Smith at AsureQuality argues it won’t be, because there are “hidden costs” in the current system that the companies will have to pick up, such as having a pool of reserve inspectors, which AQ provides.

If this was just a matter of the companies becoming responsible for minor defects and the appearance of the meat, there wouldn’t be a problem. But the company-employed inspectors in those five plants are also charged with preventing faecal contamination. They have to spot the shit on the meat.

 

Shit is a huge problem in processing plants. Often, when the animals are being butchered, the large intestine is nicked or burst, spreading shit across the rest of the carcass, and there are numerous other ways — and forms — in which the contamination can occur.

“In some cases it will be chunks of shit,” Baldick says. “It would range from faecal pellets in the anal cavity to globs of shit, smears…”

The consequences of contamination could not be more serious. Shit can harbour salmonella, campylobacter and e. coli. American regulators are especially aware of its dangers, after an e. coli outbreak in 1993, caused by faecal contamination, killed four children and left hundreds of people seriously ill.

A recent United States Department of Agriculture (USDA) report concluded: “Contamination of carcasses by animal faeces is probably the principal mode by which pathogens reach the consumer.”

Contaminated food is both a health problem and a reputational issue. Dairy co-operative Fonterra knows that all too well, following its recent series of contamination cases. Even though the largest of those, the botulism scare in mid-2013, turned out to be a false alarm, it did untold damage to the country’s export reputation, left Fonterra facing a lawsuit from food multinational Danone, and has caused smaller infant formula producers to claim that their market in China has been “virtually wiped out”.

Carol Barnao at MPI says company inspectors “only inspect meat for non-food-safety or quality aspects”. But as the MPI’s “schedule one” makes clear, that includes “process defects such as faecal…” If the change to company inspectors was genuinely a matter of non-food-safety inspections “only”, there would not be a problem. But that’s not the case.

Government inspectors  who have slowed or stopped the chain have told Metro they have been threatened with knives and baseball bats.

The shift to company-led inspection has plenty of other flaws, Baldick argues. A meat-processing plant is a pressure-cooker environment in which the company stands to lose money every time the chain carrying the carcasses is stopped. Government inspectors who have slowed or stopped the chain have told Metro they have been threatened with knives and baseball bats and had company staff threaten to kill their families.

AQ’s Kelvan Smith confirms that intimidation does occur, even if “nine times out of ten” the incidents are resolved with the companies.

Company-employed inspectors, Baldick says, will be all the more vulnerable to pressure to keep up the production rate, even if that means passing carcasses that have faecal contamination. “In an abattoir, it’s all about the three Ps: production, production, production. Everybody gets their arses kicked if the chain stops. It’s not that people will deliberately cheat. It’s about people’s bottoms getting flamed.”

Affco’s Rowan Ogg vehemently rejects claims of intimidation. He says company staff are “put under pressure to ensure that our quality standard is maintained”.

But Baldick says company-employed inspectors have a strong financial incentive not to slow production. Unlike government inspectors, who are paid a fixed wage, company inspectors in some plants are paid for each carcass they inspect. Baldick says some receive more than $1 per carcass — a significant incentive to keep the chain moving.

 

The new system was trialled at Talley’s Imlay plant in Whanganui in 2010-2011. Instead of the usual four initial government inspectors, there was just one, checking carcasses for “food safety” issues. The other carcass inspector and the two viscera inspectors were employed by the company itself.

The inspector on the detain rail was removed altogether and replaced by a “Rover”, a government inspector who kept watch over the whole inspection process while also dealing with paperwork — which took up around one-fifth of the working day.

The government inspectors at Imlay were startled to discover that while they themselves had had at least 20 weeks’ training, and were usually mentored by other inspectors for several months after qualifying, their company-employed replacements were put on the job with just two or three days’ training.

It quickly became clear to the government inspectors that the company staff — and their new system — were not up to the job. Metro has seen signed affidavits from several government inspectors who worked at Imlay, all of whom say the company inspectors were regularly waving through contaminated carcasses.

One, interviewed by Metro, said: “We were seeing copious amounts of faecal and other contamination being missed by the company inspectors.” The company staff, the inspector said, “just didn’t have enough experience. It’s the speed of the chain… You could quickly get behind and it isn’t hard to miss stuff.”

The contamination being missed was identified in random sampling known as the “statistical process control system” (SPCS), which is done on carcasses before they are packaged up for market. SPCS is supposed to be a final check that the inspection system is working.

One of the most serious allegations made about Imlay concerns what happened when the initial SPCS checks showed high levels of contamination. Several inspectors either swore affidavits or told Metro the SPCS checks were not “random” because they were required to notify the companies before they carried them out.

They say the companies would use this advance notice to place two or three extra labourers in front of the inspector doing the checks. Those labourers would trim any potentially contaminated meat to ensure a low level of contamination was recorded.

“It wasn’t, in reality, a proper check of the people doing the job,” says one of the government inspectors.

These allegations would be serious in their own right. They are even more so because the rollout of the new system is based almost entirely on Imlay’s supposed success.

Richard Wagstaff, a PSA national secretary, says the Imlay trial process was “shambolic”.

The inspectors say their concerns were raised with both AsureQuality and MPI — but no action was taken. When asked if the ministry knew of these allegations, Barnao appears uncertain, saying: “I think I would… need to verify that to be absolutely accurate across our verification team.”

She adds: “It would be fair to say there were a number of issues that came out of the trial that AsureQuality, MPI and the companies were managing quite closely… We certainly would have taken anything like that seriously.”

But she refused to release the documentation of the trial, calling it “commercially sensitive”. (At press time, MPI had not responded to our request under the Official Information Act for that documentation, saying only that “inspected meat met the standards for safe and suitable food, and all meat exported met market safety and suitability requirements”.)

Richard Wagstaff, a PSA national secretary, says the Imlay trial process was “shambolic. I remember thinking and saying, ‘I have been through a lot of change processes, but this is one of the worst.’”

 

Wagstaff also believes the trial could have damaged New Zealand’s relationship with key export markets, especially the United States. He recalls a meeting with Barnao, on the Wednesday before the trial was due to start the following Monday, where he was assured that US officials knew all about the trial, and were happy to take the meat it produced. But when the inspectors showed up for work on the Monday, they were told there had been “a change of plans” and that none of the meat would be sent to the US.

Questioned about this, Barnao says that “doesn’t specifically” fit her recollection of the meeting — but won’t directly contradict Wagstaff’s account.

Wagstaff was sufficiently concerned by these events to travel with Baldick in April 2011 to America, where they met two senior officials from the USDA, Ronald Jones and Andreas Keller. The USDA refused to comment on the meeting when contacted by Metro. But Wagstaff says that, while the officials were aware the trial was taking place, they didn’t know how it was being run and in particular they had no idea the company inspectors were receiving so little training.

His account of events is supported by Tony Corbo of the American consumer group Food & Water Watch, who was also present at the meeting. “The reaction we got from Jones, and especially Keller,” Corbo says, “was that they weren’t being told what was going on during the trial.”

After the PSA’s trip to Washington, one thing that did change was the level of training for company inspectors, which was increased to match that of the AsureQuality staff. Wagstaff says that happened because US officials, alarmed by what he told them, put pressure on MPI. “We think that the direct result of that meeting was that the USDA required that training was significantly enhanced. And it was.”

Barnao refuses to comment specifically on the training, but acknowledges that, in the trial, “we found areas that needed further work and areas that we needed to emphasise as the trial progressed and we learned more”.

So was it a mistake not to keep the US fully informed? Barnao, after talking about how the trial “looked at what the US requirements were”, will only say: “We did start at some stage a conversation with our US counterparts.”

 

Having raised their concerns in Washington, Wagstaff and Baldick carried on to Europe, where they met European Union officials and a British member of the European Parliament, Stephen Hughes.

Hughes later raised the issue in the European Parliament, stating his concern that contaminated meat from the trial could have found its way to the EU, and highlighting his concerns about an incident at Imlay in which a completely unqualified worker was left to check around 80 carcasses when one of the company inspectors left their place to go to the toilet.

In response, in October 2011, New Zealand government officials assured the EU that the unqualified worker “had previously received training although not yet having received his formal certificate”. However, when asked by Metro, MPI was unable to confirm how much training the worker had had or whether he ever received his formal certificate. Metro understands he has never worked as a meat inspector.

In its response to the European Parliament, the government also claimed the 80 carcasses were “re-inspected by the official veterinarian”. If true, this would have prevented any contamination. However, Imlay’s regulatory activity record (RAR), in which all incidents are logged at the time they occur, tells a different story. It says simply: “No action was taken by VA [the MPI vet].”

We have also spoken to a government inspector who was present during the incident, who did not see the vet take any action. To re-inspect all those carcasses, the inspector added, the vet would have had to stop the chain straight away — which didn’t happen — or hunt out the carcasses in the chilling room, where they sit before being cut up.

But since by then the carcasses would have all got jumbled around, they could have been located only through the time label stamped on them — and that would be possible only if the vet knew the exact time that the unqualified worker had done the inspection. Even then it would be an exceptionally long and painstaking task, and it is difficult to see, the inspector says, how it could have happened.

So did New Zealand officials mislead the European Parliament? When asked, Barnao will only say: “I’m sure that we have managed the process very tightly.”

Either way, the government’s assurances about Imlay were enough to convince both Europe and the United States to accept meat processed under the new rules.

It helped that similar changes were under way in other countries. Both Australia and Canada have in recent years shifted to company inspection systems, and American firms are lobbying hard for the same.

To those driving the change, the standard, heavily regulated inspection systems seem like a relic of the past, defended only by trade unions that have failed to keep pace with the efficiencies of the modern world. Barnao describes the clash by saying that, among some inspectors, “there is still a sense of tradition versus innovation”.

In this context, it is hardly surprising that New Zealand’s export partners gave the new system their stamp of approval in 2012, and company inspection was rolled out to five plants. Barnao calls it a “very measured” approach.

The five plants were Imlay, and one plant from each of the big four firms: Manawatu Beef Packers (also Talley’s); Marlborough Meats in Blenheim (Anzco); Pareora, near Timaru (Silver Fern Farms); and Smithfields, also near Timaru (Alliance). The shift represented, in Kelvan Smith’s words, “probably the biggest change in meat inspection in 50 years”.

 

Evidence provided to Metro by government inspectors reveals it is not going well. They say they are being put under more pressure than ever not to report problems, and that some of their fellow inspectors are bowing to that pressure. (We have chosen not to name the individual plants, in order to avoid identifying the inspectors working there.)

Government inspectors say they are being put under more pressure than ever not to report problems.

Our informants have described their own observations and provided copies of official reports, detailing ongoing food-safety violations at the plants operating under company inspection. Many of the new company inspectors are unable to cope with the demands of the job, they claim, and are under intense pressure not to stop the chain. The remaining government inspectors are having to help them out, potentially endangering the quality of their own inspection. Dangerous diseases and defects are being missed in an atmosphere of increasing hostility towards independent inspection.

One government inspector told us the skill level of company-employed inspectors “varies greatly, from top ex-AQ staff to the newly qualified ex-labourers.” Other evidence provided to us of their inability to cope includes:

  • “Company inspectors were observed passing heads with cancer eyes present.” When challenged, they attempted to claim this was acceptable, and had to be told this is “totally untrue”.
  • “Towards the end of the season, shortcuts in viscera inspection were observed, in particular all co. [company] inspectors were observed not palpating the heart after making the incisions.” That’s an important procedure for picking up disease.
  • Government inspectors were “continually” asked “to help out in their decision-making. It is apparent that some are not up to it.”
  • Not reporting diseases to the government inspectors, as required.
  • Performing adequately only when closely supervised, then, “as soon as our backs are turned, they revert to incomplete inspections”.
  • Failing to keep up with the speed of the chain: “They are only able to do some of the procedures and often miss diseases and shit.”

In theory, the company inspectors should receive some kind of supervision from the Rover, who has oversight of the whole inspection process. But the Rover is away from the inspection area doing paperwork for at least 20 per cent of the working day.

Because there is no longer an inspector stationed at the end of the detain rail, there are no proper checks on whether the trimmers are removing contamination identified further up the line. The result? “During an SPCS check of 40 or 60 carcasses on detain each week,” records one inspector, “AQ regularly find [various diseases] missed by the qualified co. [company] detain trimmer.”

Another serious problem is that carcasses on the detain rail are not cleared quickly enough, and are bumping up against each other — potentially spreading diseases or shit from one to another. One RAR (the record of regulatory activity) notes this happening multiple times over the period of a week.

At another plant, one inspector reports, “carcasses going onto detain rail not being seperated [sic] when rail starts to fill up, requiring AQ to stop chain until clear. Happens on regular basis and vet has had numerous meetings with co. over this.”

 

Raising concerns about such things is not easy: government inspectors claim the companies repeatedly try to challenge their authority. One records: “Company questioning AQ entries in R&R [RAR] book, in one instance accusing AQ of entering false information into R&R, which was bullshit.”

Another inspector says: “The companies challenge the RAR entries to the extent we can only record if the company says it’s ok.” The inspectors have also been accused of being “obstructive” and “targeting” some of the new company inspectors — a charge they firmly deny.

In response to this pressure, some government staff have become “reluctant to annoy the company in its endeavours”, according to their colleagues. “Some were extremely relieved to survive the restructuring process, and happy to sit on their hands.”

Another records that AsureQuality management are reinforcing this attitude: “AsureQuality praises those that don’t upset the company, especially where SPCS and detain checks are concerned.”

Perhaps the greatest concern is that the manipulation of the checks on inspection — the SPCSs — has continued, the inspectors claim. One reports: “High-scoring SPCS results that represented a gross failure were sometimes graded down to make the failure look more respectable i.e. not all defects would be documented.”

Another inspector records how the switch to company inspection “started with regular SPCS failures”. After attempting to challenge the findings, the company would then “direct or squeeze extra personnel into positions, before the Rover, to check carcasses”. Just as at Imlay, this ensured an artificially low level of contamination for the official records.

Other alleged tactics used to manipulate the records include:

  • Making it hard for inspectors to do the checks: “AQ Rovers undertaking SPCS carcass decision checks were shifted from their normal position, which offered adequate facilities and lighting, to an unfriendly semi-dangerous position further on with poor lighting, no handy washing/sterilising facilities and chain height difficulties.”
  • Forcing inspectors to carry out checks at the same speed as the original inspection is done on the chain — even though this vastly increases the chance that they, too, will miss diseases and defects: “We were told to only spend the equivalent time per carcass as the on-chain [inspector] was afforded — approx. 8.3 carcasses per min.”
  • Requiring inspectors to let companies know in advance when the checks are to be done: “Rovers auditing [company inspectors]… were encouraged to refrain from cold calls — i.e. not giving them a warning of an audit coming.  Company were forewarned prior to the check commencing.”

Government inspectors are also expected to help the company inspectors. This approach has even been formalised in some plants, where government staff carry out some of the tasks the company inspectors are supposed to be doing — because they simply cannot keep up.

AsureQuality’s Kelvan Smith describes this as “a sensible compromise to work with the companies”. Baldick says it is evidence the new system doesn’t work, and that AQ has become even more dependent on the very firms it is supposed to be regulating.

Now there is competition, with firms able to shift to company inspection or stay with AsureQuality, he says the agency is doing things it shouldn’t in order to retain business. “If they upset the customer, the customer will get somebody else to do the inspection. That’s the threat.”

According to Baldick, AQ inspectors “are basically propping up a system that’s not working”.

 

The meat industry argues the AQ inspectors are opposed to change and are simply trying to protect their jobs.

Talley’s Rowan Ogg says the inspectors are wrong to say the companies know when an SPCS check will take place, and that means it’s implausible to claim the checks are being manipulated. “It can happen at any time of day… People simply don’t know which carcasses will be checked or when the checks will be done… whoever has told you that is likely to have an axe to grind.”

Ogg also says contamination rates at Imlay have “virtually halved” since the change to the new system, and Silver Fern Farms’ Wayne Shaw says their rates are at “similar sorts of levels to what we have traditionally seen”.

The AsureQuality review is a catalogue of failings, especially when it comes to the ability of new company staff.

While the overall picture is not clear (Barnao is unable to provide figures across the five plants), Tim Ritchie, the head of the Meat Industry Association, which represents the companies, says the new system is “in line with international best practice” and that he understands the testing from the five plants shows it is at least as good as the old system.

It is, he adds, “about ensuring that our reputation is not tarnished and doing things in a way that enables us to extract another dollar from the customer, which is the reason we are there.”

He says the criticisms “are totally irresponsible. Anyone that goes out and potentially tarnishes our long-earned reputation [for good food safety], you have to question why they are doing it.”

Yet many of the inspectors’ claims have been confirmed by a review AsureQuality carried out last year and released to us under the Official Information Act.

Although AQ claims in the report that “substantially our obligations… have been met”, the document is a catalogue of failings, especially when it comes to the ability of new company staff.

Failure to give them full training meant many had to get their experience “on the job”; some trainees “lacked the experience to continuously make correct decisions at chain speed”; mentoring relied on AQ staff and was provided at “varying levels”; and senior company staff supposed to be supervising their inspectors had “minimal understanding of the meat inspectors’ legislative function and role”.

The review also found that AQ inspectors were logging the same issues over and over again. It notes, without further explanation, that “most [government inspectors] expressed concern at the requirement to allow missed diseases and defects to pass”. And it records that, “Data collection on carcasses being release [sic] off the detain [rail] showed some carcasses were still being released with non-food-safety defects still present.”

The report makes a range of recommendations for dealing with these problems, but our interviews with meat inspectors continuing into 2014 have found that the same concerns are still being raised.

 

Evidence from the United States, uncovered by Metro, shows that Baldick and others are right to raise concerns. The US does not treat faecal contamination as a quality or appearance issue. On the contrary, it has a “zero tolerance” policy: any meat with even the slightest amount of shit on it is immediately turned away at the border.

Countries operating company inspection systems have fallen foul of this policy. By June 2012, Australia, which has been using company inspection since 2011, had had at least a dozen separate shipments of meat rejected by the US due to either faecal or e-coli contamination, according to reports at the time.

In August and September 2012, it was Canada’s turn to cause trouble: millions of tonnes of beef from a company inspection plant had to be recalled, both from the US and from Canada, after it was found to contain a potentially deadly strain of e. coli which caused 18 people to fall ill.

Has New Zealand avoided these problems? The ministry’s Carol Barnao told Metro it was “a myth” that New Zealand meat had been rejected by the United States. She was not aware of MPI receiving any letter on the issue.

Since 2011, seven consignments of NZ meat have failed to meet the US zero-tolerance standard. This has never been disclosed to the public.

But our investigation has turned up a letter, written in April 2013, from the USDA to Food & Water Watch, in which the American Under-Secretary for Food Safety, Elisabeth A. Hagen, notes concern about “the increased port-of-entry zero tolerance violations” by New Zealand meat. “New Zealand responded to [USDA] concerns related to zero tolerance and committed to a national review of hygienic dressing procedures,” Hagen’s letter says.

In response to our further questioning, MPI has acknowledged that New Zealand did indeed receive a warning from the USDA about its poor record: since 2011, seven consignments of meat have failed to meet the US’s zero tolerance standard, and been rejected.

This has never been disclosed to the public, and it is not likely the violations were minor. According to Food & Water Watch’s Tony Corbo, in some cases the meat rejected at the US border was visibly contaminated with faecal matter.

However, MPI insists that its review of procedures “found that all New Zealand establishments are substantially in compliance with the [US] requirements and that there were no indicators of systemic failure”.

It also claims — in an interesting twist — that none of the contaminated meat came from the five plants that have switched to company inspection.

Baldick says that doesn’t “in any way” reduce his concerns about the new system, which won’t yet be having a big effect. But it has still greatly increased the odds that, at some point, contaminated meat will get through. “It will go along sweetly for quite some time, I suspect — and then, bingo, we will have a Fonterra on our hands, because eventually something goes wrong and the back-up checks aren’t there.”

 

How quickly will the new system spread beyond the current five plants? It’s not clear. Talley’s is on record wanting to press ahead; the other companies are either reluctant to commit publicly or say they are exploring whether improvements can be made to the traditional system.

Baldick and other inspectors believe the firms are having second thoughts. Emails shown to Metro reveal American officials now regard Australia, perhaps the most enthusiastic supporter of company inspection, as “the worst performer of all their exporting countries” when it comes to food safety.

A recent EU inspection of Australia’s system found it did not meet European guidelines — though it had previously been given the all-clear — because the inspection was being carried out by people paid by the companies producing the meat. Australia could not show that its inspectors “have a status which ensures their impartiality and have no direct commercial interest in the animals or products being certified or in the holdings or establishments in which they originate”.

That looks like an explicit rejection of the company inspection system and the blindness of its proponents to the way it compromises impartial decision-making. (The same criticism does not apply to the AQ system, because income AQ receives from meat companies is not related to the government inspection process.)

Yet it is striking the extent to which key players reject the very idea that companies might behave badly. The Meat Industry Association’s Tim Ritchie told us that the likely impact on their reputation if problems are found means “companies have a pretty good incentive to actually do it [detect contamination] and do it sensibly”.

This is the view that has guided much of New Zealand’s deregulation in recent decades: who needs rules, when companies face the threat of reputational damage in a small society where scandals are hard to hide and seldom forgotten?

As Baldick points out, there is a long history, here and abroad, of companies that have done terrible things with far too little regard for their reputation. In this country, Pike River is only the most recent and most tragic, and Fonterra has had its own wake-up calls. Will the meat industry be next?

Politics