US impounds PureCircle stevia under new forced labour law; Singapore firm has stake in importer

NEW YORK (REUTERS) - The United States has seized low-calorie sweetener stevia imported from China by PureCircle Ltd, making it the latest company to be targeted by a new law that bans imports of products made by forced labour.

US Customs and Border Protection said it moved to crack down on imports of stevia extracts and their derivatives from China brought into the country by PureCircle after it obtained information that they are produced by convict labour.

The plant extract is used as a sweetener in Coca-Cola Co's Coke Life, PepsiCo's True and other popular sodas.

A spokeswoman for PureCircle disputed the allegation, stating the company has provided documentation it has not worked with Inner Mongolia Hengzheng Group Baoanzhao Agricultural and Trade LLC, which was also named in the complaint.

"We have an explicit policy prohibiting use of prison or forced labour in any part of our business," she said in an emailed statement, noting it is certified by independent auditors to ensure that.

Singapore-listed Olam International owns a 17.8 per cent stake in PureCircle, a major supplier of sugar and aspartame alternatives, according to PureCircle's website.

Companies have three months to prove the stevia was not produced by force labour, a spokeswoman for the US agency said on Wednesday (June 1).

"It is imperative that companies examine their supply chains to understand product sourcing and the labour used to generate their products," the agency Commissioner R Gil Kerlikowske said in a statement.

Responding to the news, Coke said its supplier had confirmed it had not received stevia produced by the accused Inner Mongolia company. Company policy prohibits the use of forced labor in its operations and supply chain, Coke said in an email.

The action is the latest sign that the new legislation, which bans imports of goods made by forced labour, could have a far-reaching impact on companies that buy ingredients from abroad as the United States pushes to improve transparency across global supply chains. The Trade Facilitation and Trade Enforcement Act of 2015 was signed into law in February.

This is the third product seizure since the law came into effect.

Imports of potassium and other related products brought in by Tangshan Sunfar Silicon Industries have been impounded and shipments of soda ash and other chemicals by Tangshan Sanyou Group and its subsidiaries have been seized.