Key Points:

It was repeatedly made clear in phone calls to the Chinese company that sold milk formula fatally contaminated with melamine that the chemical should not be used, Fonterra's chief executive said today.

Six babies died and hundreds of thousands of infants last year developed kidney disease after consuming contaminated milk formula produced by Sanlu, a company which was 43 per cent owned by Fonterra.

Former Sanlu chairwoman Tian Wenhua, 66, has claimed a Fonterra-appointed director gave her a document stating the European Union's permitted levels of the industrial chemical melamine were a maximum of 20mg to every kg of milk.

Fonterra chief executive Andrew Ferrier confirmed to the Herald yesterday that Tian had been given a document by a Fonterra board member.

However, he said Fonterra was "vividly clear" to Sanlu that the only acceptable level of melamine was zero.

At a media conference today, Mr Ferrier said the document given to Tian was a provisional statement from the European Union on melamine.

Mr Ferrier said that at the time Fonterra was "trying to find out what melamine was, what can it do to people's health".

"But at that time those documents were handed over, our director made it very clear to Sanlu that the only acceptable level of melamine was zero, he said.

Mr Ferrier said that message was communicated in phone calls of which minutes were taken.

There was "phone call after phone call after phone call" on the subject, he said.

Asked if he would supply those to the media, Mr Ferrier said he would not because of a possible appeal by Tian against her conviction for producing and selling false or substandard products.

Tian was sentenced last week to life in prison. Three other company executives received 15, eight and five-year sentences respectively and two men were sentenced to death over the scandal.

China's state news agency, Xinhua, said rather than stopping production of tainted products after the contamination was confirmed on August 1 last year, Sanlu decided to limit melamine levels to within 10mg for every kilogram of milk.

"Tian said during her trial that she made the decision not to halt production of the tainted products because a board member, designated by New Zealand dairy product giant Fonterra that partly owned Sanlu Group, presented her a document saying a maximum of 20mg of melamine was allowed in every kg of milk in the European Union," Xinhua said. "She said she had trusted the document at that time."

At today's conference, Mr Ferrier was also questioned on the outcome of what he called "an independent investigation" into the contamination.

He said the investigation found that Fonterra had acted properly. Fonterra chairman Henry van der Heyden said the investigation would not be made public because "it was a commercial decision".

He also refused to say who had carried out the investigation and expressed confidence in Mr Ferrier.

Mr Ferrier said a compensation package had been funded by Sanlu and other dairy companies.

He said the company had learnt important lessons from "the saga", which had cost Fonterra over $200 million.

Fonterra would look at re-entering the Chinese market, he said.

- With NZHERALD STAFF