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Sri Lankan court lifts Fonterra suspension

August 23, 2013

COLOMBO, Sri Lanka (AP) — A Sri Lankan court on Friday lifted a suspension on New Zealand dairy giant Fonterra from selling and advertising its products just hours after the company announced that it was temporarily closing its plant in the country because of safety concerns for its staff.

Fonterra said Friday that it was suspending its operations in Sri Lanka to ensure the safety of its approximately 755 workers. The decision came a day after members and supporters of a Sri Lankan government-allied political party demonstrated across from Fonterra’s offices, accusing it of selling tainted milk.

“The temporary suspension is the right thing to do. It is a precautionary measure to ensure our 755 people working there are safe,” Fonterra’s chief executive, Theo Spierings, said in a statement posted on the company’s website. “We have closed our plants and office in Sri Lanka, and have asked our people to stay at home.”

He said the company had given “every possible assurance” to the Sri Lankan government on the safety of its products, but that recent events had made it difficult to maintain daily operations.

A nurses’ trade union last week won a court decision ordering Fonterra to stop selling and advertising its products after the Health Ministry said tests performed by the government confirmed that two batches of two imported Fonterra milk products showed traces of the agricultural chemical dicyandiamide.

Fonterra also faces a contempt of court charge for allegedly not adhering to the court order.

Roshan Kulasuriya, Fonterra’s corporate affairs director in Sri Lanka, said the company was happy with the lifting of the suspension, but that its operations may not resume until the safety concerns are addressed.

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