Brazil Halts BYD Factory Construction Amid Reports of Worker Exploitation

Brazilian officials have suspended the BYD electric vehicle factory project, rescuing over 160 workers facing inhumane living conditions and forced labor practices in Bahia. BYD has stated its commitment to compliance with local laws and is distancing itself from the implicated construction company.

Brazilian authorities have taken a decisive stance against human rights violations in the labor sector by halting the construction of a factory for Chinese electric vehicle (EV) manufacturer BYD. More than 160 workers were rescued from deplorable living conditions reminiscent of "slavery" in Bahia, as reported by the Public Labour Prosecutor's Office (MPT).

These workers, employed by Jinjiang Construction Brazil, resided in facilities that lacked basic amenities. Reports indicate they endured nights on mattresses without bedding, while shared bathing facilities were overcrowded, forcing workers to wake at unreasonable hours to prepare for their shifts. "The conditions found in the lodgings revealed an alarming picture of precariousness and degradation," the MPT stated.

According to Brazilian law, "slavery-like conditions" are characterized by debt bondage and employment that violates human dignity. The MPT identified the situation as "forced labor," where many workers had their wages not only withheld but also faced prohibitive costs for breaking away from their contracts.

Responding to the situation, BYD publicly announced that it has severed ties with the construction company, emphasizing its dedication to adhering to Brazilian legislation. The company has subsequently relocated the impacted workers to hotels. Furthermore, BYD indicated it sought to address living and working conditions with the contractor for several months prior to the suspension.

BYD, which has emerged as a global leader in electric vehicle production, particularly after surpassing Tesla in sales towards the end of 2023, first established operations in Brazil with a factory in São Paulo in 2015. The company planned to invest over $480 million in this new plant, aimed to be operational by March 2025, marking its first EV production site outside Asia.

This incident shines a light on the burgeoning EV industry and the importance of ethical labor practices, especially amid increasing tensions as major markets like the US and EU impose tariffs on Chinese-made vehicles amid concerns about unfair government subsidies fueling their growth. As BYD expands its presence in Brazil, it faces the critical task of ensuring the welfare of its workers in order to maintain its reputation and operational integrity.