Brazil sues China's BYD over worker trafficking, abuse at EV plant site

Business Standard

28-05-2025

Brazilian labour prosecutors have filed a lawsuit against Chinese electric vehicle (EV) giant BYD and two of its contractors, JinJiang and Tecmonta. They have charged the automaker for alleged human trafficking and 'slavery-like conditions' faced by Chinese workers constructing a BYD factory in the state of Bahia, news agency Reuters reported.
The lawsuit, filed on Tuesday, seeks 257 million reais ($45 million) in moral damages from the three companies, alongside individual compensation for the 220 Chinese workers who were allegedly exploited. The Public Labour Prosecutor's Office (MPT) is also demanding compliance with a series of labor regulations and an additional fine of 50,000 reais for each violation, multiplied by the number of affected workers.
Workers lived in overcrowded, unsanitary conditions
The factory, located in the city of Camacari in northeastern Brazil, was intended to be BYD's first EV manufacturing facility outside Asia and was scheduled to begin operations in March 2025. However, construction was halted late last year after Brazilian authorities found alarming labor violations following an anonymous complaint, BBC reported.
According to prosecutors, the 220 Chinese workers were found living in cramped quarters, with some sleeping on beds without mattresses and sharing a single toilet among 31 people. They were allegedly subjected to exhausting work hours, denied weekly rest, and forced to sign employment contracts with illegal clauses. The MPT said workers also had their passports confiscated, up to 70 per cent of their salaries withheld, and faced high penalties for terminating their contracts.
Under Brazilian law, 'slavery-like conditions' include debt bondage, degrading work environments, and violations of human dignity.
BYD responds, denies wrongdoing
In a statement, BYD said it is committed to upholding human rights and adheres to both Brazilian and international labour standards. The company noted that it has been cooperating with labor prosecutors and intends to address the allegations through legal proceedings. It has previously stated that it maintains a "zero tolerance for violations of human rights and labour laws".
Fabio Leal, a deputy labour prosecutor, said that negotiations with the companies began in late December but failed to reach an agreement.
"The workers were brought to Brazil illegally and promised working conditions that were not fulfilled," Leal said. "Our lawsuit is very well-founded, with a substantial amount of evidence provided during the investigation process."
Leal confirmed that the Chinese workers, who have since returned to China, are expected to receive any compensation awarded through the lawsuit, with the companies in Brazil required to prove the payments were made. He added that while a court-mediated settlement remains possible, it would now need to be facilitated through the judicial system.
BYD, which stands for 'Build Your Dreams', is one of the world's largest EV manufacturers. In April, it surpassed Tesla in sales across Europe for the first time, the BBC report said.
The company has been steadily expanding in Brazil, its largest overseas market, where it opened its first facility in Sao Paulo in 2015 to produce electric bus chassis.
(With agency inputs)