Brazil Suspends BYD EV Plant Construction Over Worker Conditions

Brazilian authorities have suspended the construction of a plant for Chinese electric vehicle maker BYD in the country, saying construction workers worked in “slavery-like” conditions and are victims of human trafficking.

The 163 workers are being housed in hotels at the expense of BYD and construction contractor Jinjiang Group while a deal is reached to end their contracts, Brazil’s Public Labour Prosecutor’s Office (MPT) said in a statement after meeting with the companies.

Under Brazilian law, “slavery-like condition” include debt bondage and work that violates human conditions.

“The conditions found in the lodgings revealed an alarming picture of precariousness and degradation,” the MPT said in a statement.

‘Slavery-like’ conditions

Jinjiang said in a social media post reposted by BYD that it was inaccurate to describe the workers as “enslaved” and that there were translation misunderstandings.

The MPT published photographs of worker dormitories with bunk beds that had no mattresses.

It said each bathroom was shared by 31 workers, forcing them to rise extremely early in order to arrive at work on time.

The agency said the workers were subject to “forced labour” as many had their wages withheld and faced excessive charges for terminating their contracts.

It said it had asked on “several occasions” for Jinjiang to make improvements.

The agency did not elaborate on its separate assessment that the workers were victims of human trafficking.

‘Foreign forces’

BYD initially said it had cut ties with Jinjiang, but an executive later said “foreign forces” and some Chinese media had been “deliberately smearing Chinese brands and the country and undermining the relationship between China and Brazil”.

China’s foreign ministry said it is in communication with Brazil to verify the situation, saying it protects workers’ rights and requires Chinese companies to obey the law.

The MPT said it would meet again with the companies on 7 January to propose a solution.

A deal could clear BYD and Jinjiang from prosecution by the MPT but could mean further scrutiny from labour inspectors and from federal prosecutors.

Federal prosecutors have requested the sharing of evidence so that “measures can be adopted in the criminal sphere”, the MPT stated.

The situation is an embarrassment for BYD, one of the world’s largest EV makers, which dominates the Chinese market and has at times surpassed Tesla in worldwide sales of battery-electric vehicles.

Key market

Brazil is the firm’s biggest market outside of China, accounting for nearly one in five cars it sold outside its domestic market in the first 11 months of 2024.

BYD has invested $620 million (£493m) in the plant in the eastern state of Bahia, which is intended to be its first EV plant outside of China.

In China the incident has stirred a rare backlash on social media, with several internet users saying the conditions described were typical of those found on construction sites in China.

The situation also creates a quandary for Brazil, which has long sought Chinese investment.

China’s model of sending Chinese workers to the countries where it invests is at odds with the local job creation priorities of president Luiz Inacio Lula da Silva.