Brazil’s Ministry of Labor and Employment has added BYD to its official registry of employers linked to labor conditions analogous to slavery. The designation blocks the Chinese automaker from accessing credit lines from Brazilian state banks, marking a significant escalation in a dispute over the construction of its factory in the state of Bahia.
While the company continues production at the facility, the government ruling holds the automaker accountable for the actions of its contractor, the Jinjiang Group. Brazilian authorities determined that BYD failed to exercise necessary oversight regarding the treatment of 163 Chinese workers brought to the country to build the plant.
Evidence of labor exploitation
Investigators uncovered a series of practices that led to the blacklisting. According to official reports, workers were required to surrender their passports to their employer upon arrival. Contracts also mandated that a substantial portion of their wages be deposited directly into accounts in China.
Furthermore, workers were required to pay a deposit of approximately $900, which was only refundable after six months of service. Labor inspectors described the living conditions as "degrading," noting that up to 31 employees were housed in single units with only one bathroom. Reports also detailed unsanitary conditions where food was stored on floors alongside personal belongings.
Jinjiang Group has rejected the allegations of abuse. For its part, BYD maintains that it was unaware of these irregularities until they were exposed by Brazilian media outlets in late November. Despite these claims, the Brazilian government maintains that the automaker bears legal responsibility for the conditions inside its construction site.
BYD previously reached a settlement with labor prosecutors, but the agreement failed to satisfy labor inspection authorities. Having exhausted its administrative appeals, the company faces a two-year stint on the government’s blacklist. The company can only be removed sooner if a court intervenes or if it successfully negotiates a compensatory agreement with the government that includes specific remedial actions.
The scandal has complicated BYD’s expansion in Brazil, which serves as a vital hub for the company's global strategy. While the factory has already produced more than 25,000 vehicles, the labor dispute has cast a shadow over the industrial project. The situation remains a point of friction in the otherwise strong diplomatic and trade ties between Brasilia and Beijing.
