By Alisa Tang

BANGKOK (Thomson Reuters Foundation) - A guilty verdict for a British activist in Thailand charged with defamation for alleging ill-treatment of migrant workers at a big fruit company sets an alarming precedent in the fight against labor exploitation, rights groups said on Tuesday.

A Thai court handed Andy Hall of the Migrant Worker Rights Network a three-year suspended prison sentence for criminally defaming Natural Fruit Company, a pineapple wholesaler that supplies the European Union, over a 2013 report he helped author for Finnwatch, a Finland-based watchdog group.

"This will clearly have a chilling effect on independent research on supply chains all over Thailand," Brad Adams, Asia director of Human Rights Watch, said.

"The concern is that we will see copycat prosecutions from other companies anytime someone criticizes them."

Thailand's harsh defamation laws have drawn criticism from rights groups concerned about curbs on freedom of speech in a country at the center of scores of reports about labor rights violations and modern-day slavery in its food industries.

Migrant workers are the most exploited, activists say. Thailand has more than 3 million migrant workers, mostly from neighboring Myanmar, according to the International Organization for Migration.

Adams said he hoped the verdict would prompt international companies to think twice about sourcing products from Thailand as they seek to comply with tougher legislation abroad designed to make sure supply chains are free from forced labor.

"For any company around the world that is seriously interested in compliance with certain ethical principles, with respect for basic labor rights and human rights in supply chains, I think this conviction needs to put Thailand on a possible no-go list," he said.

"RETALIATION"

Activists called for defamation to be decriminalized and punishable only under civil law, which would mean monetary damages rather than prison time.

"Defamation should be a civil matter, not a criminal matter, and Thai laws, including criminal defamation and the computer crimes act, must stop being used as a form of retaliation against human rights defenders," said Kingsley Abbott, a legal adviser for the International Commission of Jurists.

"Imprisonment is never an appropriate punishment for defamation... Imprisonment is considered a disproportionate response to reputational harm and imposes too much an impediment to freedom of expression."

The court sentenced Hall to four years in prison, but reduced the sentence by one year "due to his history of doing public good and his record as a rights defender", a judge said.

The court will suspend the sentence, the judge said, meaning Hall will be free unless he breaks the law during that period.

Abbott cited two similar cases - one against human rights defenders charged with defamation for raising allegations of torture in Thailand's conflict-troubled deep south, and another defamation case against communities impacted by development.

Foreign governments and non-governmental organizations had closely watched Hall's case as a gauge of how serious Thailand is about addressing forced labor of migrant workers.

Robert Pajkovski, country director of the Solidarity Center workers rights group, said he believed the decision was meant to appease both sides.

"What they sought was to strike a balance - to help the employer save face, not to lose, and at the same time, not to jail Andy, to let him go with a slap on his wrist... but I don't think they satisfied anyone really," Pajkovski said.

Tuesday's guilty verdict was met with glee by at least one Thai businessman, the owner of a chicken farm who is facing a $1.3 million lawsuit spearheaded by Hall for alleged labor violations.

Chicken farmer Chanchai Pheamphon said he planned to celebrate over dinner with Natural Fruit's owner Wirat Piyapornbaiboon and to work with the victorious lawyer to map out his own lawsuit against Hall.

"This is inspiration for me to file my own case, which is like Wirat's, in order to protect the chicken exporting industry, seek justice and show the world the truth," he said.

(Reporting by Alisa Tang @alisatang, editing by Timothy Large. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, whichcovers humanitarian news, women’s rights, corruption and climate change. Visit http://news.trust.org to see more stories)