Carmaker BYD is facing a major lawsuit in Brazil over what authorities are calling “slave-like” working conditions at a factory building site in Bahia. The Brazilian government is taking legal action against BYD, a prominent Chinese electric vehicle (EV) manufacturer, as well as two of its contractors, alleging that they were complicit in labor violations that led to a situation akin to slavery and human trafficking.
The investigation into the factory building site began in response to an anonymous complaint lodged with the Public Labour Prosecutor’s Office (MPT). As a result of the inquiry, 220 Chinese laborers were rescued from what authorities described as deplorable living and working conditions.
The MPT filed a lawsuit against BYD and its contractors seeking 257 million Brazilian reais, or approximately $45.5 million or £33.7 million. The lawsuit alleges that the workers were living in crowded and unsanitary conditions, with inadequate accommodation and minimal hygiene facilities. It was reported that employees were sleeping on beds without mattresses and sharing a single restroom among the entire crew.
In addition to the poor living conditions, the MPT accused the employers of subjecting workers to illegal employment contracts, exhausting working hours, and the deprivation of weekly rest periods. Workers also had their passports confiscated and were reportedly charged exorbitant fees to terminate their contracts, with up to 70% of their wages being withheld.
According to Brazilian law, the conditions described at the factory site constitute violations of human rights and labor laws, falling under the category of “slavery-like conditions,” which includes debt bondage and exploitation of human dignity.
The factory construction site was located in Camacari, in Brazil’s northeast region, and was intended to be BYD’s first electric vehicle (EV) manufacturing facility outside of Asia. The plant was scheduled to be operational by March 2025, but construction was halted late last year following the discovery of the labor violations.
BYD, short for “Build Your Dreams,” has a significant presence in the global electric vehicle industry and has been gaining traction in international markets. In April, research from Jato Dynamics revealed that BYD had surpassed Tesla in European sales for the first time, solidifying its position as a major player in the EV market.
As Brazil represents one of BYD’s key markets for expansion, the company has been actively seeking to grow its operations in the country. In 2015, BYD established a plant in São Paulo to produce electric bus chassis, marking its initial foray into the Brazilian market.
Despite the allegations of labor abuses in Brazil, BYD has maintained its commitment to upholding human rights and labor standards. While the company has yet to issue a formal response to the lawsuit, it has previously stated that it has a “zero tolerance for violations of human rights and labor laws.”
The lawsuit against BYD underscores the importance of ethical labor practices and highlights the need for greater oversight and enforcement of labor laws in global supply chains. The case serves as a reminder of the challenges faced by multinational corporations in ensuring compliance with labor regulations across various jurisdictions, and the potential consequences of failing to uphold basic labor rights and standards.
