(Story corrects ninth paragraph to add "alleged to", making clear that the workers' actions were alleged by the media report)
SHANGHAI (Reuters) - A Chinese joint venture of U.S.-based J.R. Simplot, which supplies frozen french fries to McDonald's Corp, was fined 3.92 million yuan ($632,370) on Wednesday by the Beijing city government for water pollution, the official Xinhua news agency reported.
The Beijing government found the venture had been discharging contaminated waste water that exceeded stipulated levels, according to Xinhua.
Xinhua said the business was a joint venture between Simplot, a unit of McDonald's Corp, and a local firm. Reuters could not independently verify the relationship.
Phone calls to Simplot in China were left unanswered.
Simplot, headquartered in Idaho, is a global potato supplier for McDonald's.
"Simplot has assured us that they have implemented a corrective action plan, and we will continue to hold them accountable for implementation and enhanced procedures for compliance," McDonald's said in an emailed statement to Reuters, adding it took the infraction "very seriously."
The fine comes as China is strengthening its environmental regulations as public anger builds over worsening pollution.
China will ban water-polluting paper mills, oil refineries, pesticide producers and other industrial plants by the end of 2016, as it moves to tackle severe pollution of the water supply which has left one-third of China's major river basins and 60 percent of its underground water contaminated.
Chinese sales at McDonald's and Yum Brands Inc's KFC slumped last year after one of their suppliers, Shanghai Husi Food Co Ltd, was forced to suspend operations after an undercover Chinese media report alleged to show workers using out-of-date meat and doctoring production dates. U.S-based meat supplier OSI Group [OSIGP.UL] is the parent company of Shanghai Husi.
(Reporting by Sue-Lin Wong; Editing by Kazunori Takada and Mark Potter)