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NEW YORK/BANGKOK, Aug 21 (Thomson Reuters Foundation) - A U.S. lawsuit accusing retailer Costco Wholesale Corp. of knowingly selling frozen prawns linked to a company that uses slave labor was described on Friday as "entirely without merit" by Thai seafood supply company CP Food Products.
A lawsuit filed in the federal court in San Francisco in California on Wednesday sought a court order to stop Costco from selling prawns without a label stating that slave labor was involved in the farm raised prawns.
The claim, citing federal and state rules on labelling and slavery, alleged Costco was aware the prawns bought from its Southeast Asian producers came from a supply chain dependent on ships involved in human trafficking and labor abuses.
The exporter, CP Food Products Inc, and its parent company, Thailand's Charoen Pokphand Foods PCL, were also named in the lawsuit that was filed on behalf of California resident Monica Sud, a member of Costco which is run as a warehouse club.
CP Foods on Friday said it had received a copy of a complaint filed in California concerning its shrimp business.
"CPF believes that it has complied with all applicable laws and regulations, and that the complaint is entirely without merit," the company said in a statement.
Sud's lawyers are seeking class-action status for the lawsuit, which means if granted it could affect millions of customers in California.
Costco, the third largest U.S. retailer, said these allegations over issues in the Thai seafood industry had been well publicized for more than a year.
This followed an investigation by Britain's Guardian newspaper into the prawn supply chain that found large numbers of men were bought and held against their will on fishing boats off Thailand used to farm prawns sold in some of the world's leading supermarkets.
The investigation found Charoen Pokphand (CP) Foods, the world's largest prawn farmer, was buying fishmeal to feed to its farmed prawns from some suppliers that owned, operated or bought from fishing boats manned with slaves.
In response to the allegations of labor violations, CP Foods said in a statement in March that it had "locked down our supply to 30 by-catch fishmeal suppliers and 380 fishing vessels, for which we have full visibility and traceability on sustainability and social issues".
It said it had also stepped up audits and monitoring of fishmeal suppliers, while the company's fishmeal traceability and audit system underwent third-party verification by an independent auditing firm.
The U.S. State Department's 2015 Trafficking in Persons Report last month singled out the "enslavement of fishermen in Southeast Asia".
Costco said it has been working with and would continue to work with various stakeholders, including the Thai government, other retailers, and Thai industry, to address the issues that have surfaced.
"In the meantime, all of our customers know that if they are dissatisfied with any purchase from Costco Wholesale they can return the item for a full refund," Costco said in a statement. (Reporting By Leslie Gevirtz, Editing by Belinda Goldsmith and Ros Russell; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, corruption and climate change. Visit www.trust.org)