Brazil Investigates Major Automaker’s Labor Practice Controversies

Hands bound with rope against a dark background.
Hands of a missing kidnapped, abused, hostage, victim woman tied up with rope in emotional stress and pain, afraid, restricted, trapped, call for help, struggle, terrified, locked in a cage cell.

BYD’s ambitious Brazilian expansion is now overshadowed by serious allegations of labor exploitation and immigration violations.

At a Glance

  • 163 workers found in slavery-like conditions at BYD construction site.
  • Brazil halts temporary work visas for BYD amid trafficking allegations.
  • BYD’s $620 million factory investment in Brazil is jeopardized.
  • BYD denies wrongdoing, attributing accusations to defamation.

Labor Allegations Unfold

The scrutiny began when Brazilian authorities rescued 163 Chinese workers from harsh conditions at a BYD factory site in Bahia. Investigators revealed that the workers suffered “slavery-like conditions,” including withheld passports and wages, and inadequate living conditions, sharing bathrooms among 31 people and sleeping on beds without mattresses. Brazil’s Public Prosecutor described this as a major violation of human dignity.

In response, the Brazilian government halted temporary work visa issuance for BYD. This action, described by the Ministry of Foreign Affairs, aims to address allegations of human trafficking that characterize the affair. An investigation, led by Liane Durao, asserted that affected workers have either left or are leaving Brazil following the rescue.

Company and Contractor Reactions

BYD plans to adhere strictly to local labor laws for the remaining workers, severing relations with contractor Jinjiang, which denies any misconduct. Despite prior assertions, BYD’s official stance now labels potential affiliations as defamation. Additionally, BYD has shifted affected workers to hotels and is reviewing subcontracted employees’ conditions, demonstrating a commitment to worker welfare.

The $620 million BYD plant in Camacari aimed to produce 150,000 vehicles annually by 2025, marking China’s growing influence in Brazil. However, the halt of construction due to exploitative conditions places this investment in jeopardy, reflecting broader international concerns regarding China’s business practices globally.

Implications and Outlook

Revocation of residence permits remains a possibility if irregularities persist. BYD is set to face fines for each worker impacted by breaches in Brazilian labor laws. The factory—part of BYD’s global EV strategy—finds itself in regulatory limbo amidst escalating international scrutiny.

The Chinese government, which claims adherence to local labor regulations, remains committed to cooperation with Brazil and addressing labor compliance issues. Meanwhile, both BYD and Jinjiang have not responded to further inquiries, leaving questions about the factory’s future and the broader implications for its international market strategies unanswered.

Sources:

  1. BYD brought hundreds of Chinese workers to Brazil on irregular visas, Reuters reports
  2. Brazil Investigates Chinese EV Giant BYD for Using ‘Irregular Visas’ to Import Slaves – DNyuz