I read a chilling prediction in the Washington Post last week, one fraught with all kinds of contradictions. It was from Yoko Tomiyama, head of the Consumers Union of Japan, reflecting on the impact of China’s melamine contamination issue.
He said that “as long as this globalized consumer system prevails, there will always be the next melamine”.
As someone old enough to remember the post-WWII importation of toys, and then cars, from Japan I couldn’t help reflect on the irony of initial quality issues that frustrated consumers who called them “Jap Crap”. And then the trauma created in Western economies, as Japan’s motor industry displaced our British and European standards with higher quality and lower prices?
That was globalisation in practice.
The melamine issue was not created by globalisation, although its breadth and scope may well have been. The melamine issue was created by greed. It was a fraud committed by individuals for their own personal gain. It wasn’t just San Lu. Correspondents in China report that a total 21 Chinese dairy companies were pulling the same stunt, albeit not to the level of contamination perpetrated by San Lu’s suppliers.
While the world has recoiled in horror at the melamine scandal, it appears more accepting of the global financial crisis. Perhaps it is easier to understand greed when it wears a collar and tie, and not overalls; or when its Western greed versus Eastern; or when there is no direct link at this time when the death of children.
The irony of the melamine scandal and the financial meltdown is that they were created by the same people – those demanding higher and higher returns for lower and lower investment cost.
China was taking advantage of this, and in some areas its food production has now been found wanting. Like Japan though, China will get the quality equation right, and as that happens there will be a new frontier of production efficiency, and as Yoko predicts there will be another melamine.
So what can we do? Be prepared.
Fonterra’s response to the San Lu issue has been dissected by almost every PR and media commentator – experienced and the inexperienced. For me, the wild card was the Chinese system. This made it different to any other crisis. However pious and righteous we might be in our views of how the issue should have been handled, Fonterra was alone in its experience of having to deal with the complexities of that country’s system of government on the eve of its biggest show on earth, the Olympic Games.
How can we be ready for the next melamine that might affect our business? Make sure we have a crisis plan; and practice, practice, practice.
Will we believe anything they say from now on? Possibly not. I’m talking about the Sea Shepherd organisation announcement publicly severing its relationship with the incarcerated Pete Bethune.