1.1 Ethical issues of Fonterra Employees
Dirty Dairying is not only affecting the employers and shareholders but also affecting the employees as well. The company or the employers are blaming their employees for Dirty Dairying. For example: Alan Crafer, the owner of Plateau Farms Ltd blamed his employees after found guilty of discharging dairy shed effluent which is the breach of Resource Management Act. His companies have previously been charged with Dirty Dairying and in his defence, he blamed his employees for Dirty Dairying and he said the employees didn’t told him about the problems about effluent discharge. He said things goes wrong on farms all the time and we told our workers to do something about it if anything goes wrong, but the workers did nothing about effluent discharge. Later, Alan Carfer was found guilty and fined $13,000 for disposing effluent on the land from where it could enter waterways.
1.2 Ethical issues of Fonterra Suppliers
The main issue is faced by the Fonterra suppliers is the late payment. Because of the money is being invested in the programmes like “2003 Dairying Clean Streams Accord” “The sustainable Dairying: Water Accord”, the suppliers have been asked by the company to wait for their payment for 90 days. The company asked to most of their suppliers to wait for 90 days to get paid. Dave Strong one of the supplier of Fonterra who operates Morrinsville Plumbing and Gas, has been asked to wait up to 90 days for the payment. Mr. Dave told media that there is no clause in their contract which states the payment will be made after 90 days. In return, the company (Fonterra) said they only asked 12 percent of suppliers to wait for 90 days for the payment.
1.3 Ethical issues of Fonterra Shareholders
The shareholders of the company are badly affected by Dirty Dairying. They are facing financial problems as well as legal problems. The company is facing the problem of losing the loyalty of their farmers as well as suppliers. The company asked their suppliers and farmers to wait for the payment up to 90 day which is making the suppliers to think again about supply the products and services to the company. In their defence the chief executive of the company said they asked only 12 percent of suppliers to wait for the payment just because company is trying to raise and spend the money on several programmes such as “2003 Dairying Clean Streams Accord” “The sustainable Dairying: Water Accord” to control Dirty Dairying. For these programmes the shareholders had to spend a lot of money. In his interview, the chief executive Andrew Ferrier said that Fonterra is raising $800 million through a substantially over-subscribed retail bond issue and they are paying 7.75% interest which means this debt alone will cost the co-operative $60 million annually. Dirty Dairying is increasing the troubles for the shareholders by decreasing their profits due the debts of the company. It is getting hard for the shareholders to earn the profits because of the high interest of the debts.
On the other side, the suppliers or farmers are being accused by the media and industry a well for Dirty Dairying. For example:
Allan Crafter who is one of the shareholder of Fonterra, which is the biggest private family dairy farming business in New Zealand, has been labelled the “poster boy for dirty dairying” by many in the industry or media.
1.4 Ethical issues of Fonterra Environment
Because of Dirty Dairying New Zealand’s fresh water is being polluted. The biggest source of nitrogen in New Zealand’s waterways is urine from farm animals rather than the runoff from nitrogen-based fertilisers. It is being considered that this pollution is increasing because of excessive Dirty Dairying that’s why a campaign is started by the company such as “Sustainable Dairying: water Accord” which became effective from 1st August 2013. It includes commitments to targeted riparian planting, improved effluent management, comprehensive standards for new dairy farms and the improvement of the measurement tools for water and nutrient efficiency which is used on farms