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China Chief Resigns Amid Massive Melamine Scandal

Sep 23, 2008 | Parker Waichman LLP

China’s food and product quality agency chief—Li Changjiang—was forced to resign yesterday amid the growing scandal over the country’s tainted milk supply.  Melamine-tainted milk  has sickened over 50,000 infants and killed at least three children, according to China’s state-run Xinhua news agency.  A recent law requires removal of top officials who fail to fulfill their duties or cause severe accidents deemed avoidable.

Li Changjiang is the most senior government official to lose his job in the scandal.  His resignation was announced as that government widened its investigation into how melamine contaminated powdered baby formula and milk products made by some of the country’s biggest dairy companies.  The massive scandal is now China’s worst yet, exceeding last year’s scandals involving tainted pet food ingredients, toothpaste, seafood, and dangerous lead-contaminated toys.  Li was one of the officials in charge of monitoring the nation’s food and product safety and was a strong advocate for increased testing and inspections of Chinese products, defending the quality of Chinese goods and criticizing Western media and American businessmen, saying they exaggerated China’s product-quality problems.

To date, the government has arrested 19 people suspected of intentionally dosing milk supplies with melamine, an industrial chemical made from coal that is used in the production of plastics, fire retardants, and fertilizers.  Melamine is toxic when ingested and was likely added to watered-down milk to artificially inflate protein counts, officials say.  Worse, the scandal has been rife with neglect and a possible cover-up.  The Sanlu Group, China’s largest producer of powdered baby formula, received complaints months ago, but postponed advising authorities until August, who then waited until September to tell provincial authorities, provincial officials said.

Finally, in mid-September, Sanlu finally recalled 700 tons of formula.  Government testing revealed tainted samples of powdered formula at 21 other companies.  Now, tens of thousands of babies are sick, over 10,000 have been hospitalized, and state media is reporting a fourth death.  Parents continue to rush to hospitals to have their children checked for kidney damage, and dairy executives are trying to save their companies, promising to compensate victims and repair their product safety tests.

Meanwhile, millions of gallons of dairy products have been recalled in Hong Kong, elsewhere in China, Taiwan, Singapore, and other countries, which has had devastating effects on China’s $18 billion dairy industry.  In response, the government fired the head of one large dairy company and the Communist Party chief in the city of Shijiazhuang.  The Fonterra Group, a huge New Zealand dairy firm, says it was aware in August of problem milk made by Sanlu, its Chinese partner, weeks before it was made public in China.  Fonterra officials pressed China to release more information.  “We’re discussing this with the government,” said Hans Troedsson, chief China representative of the World Health Organization (WHO). “They are investigating how these delays have occurred. It’s important to know so we can prevent this in the future.”

Analysts are wondering how milk contamination—again with melamine—is so widespread, affecting the country’s top brands—Mengniu, Yili, and Sanlu—despite the government’s promises and its recent food safety campaign.


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