BYD’s plant in Brazil promised jobs, now it faces a labour scandal

Hundreds of Chinese workers in Brazil, hired to build an electric vehicle factory for Chinese automaker BYD, faced exploitative labor conditions, investigators claim.

Workers signed contracts that required them to surrender their passports, accept wages sent mostly to China, and pay an almost $900 deposit—only refundable after six months, according to Brazilian authorities.

Labour inspectors in Brazil found 163 workers in “slavery-like conditions,” living in overcrowded housing without basic amenities. A December raid revealed 31 workers crammed into a single house with just one bathroom and food stored on the floor.

‘Red Flags of Forced Labor’

The labour contracts violated laws in both Brazil and China, experts say. Unreported clauses allowed the contractor, Jinjiang, to extend contracts unilaterally and impose fines of 200 yuan ($28) for minor infractions, such as quarreling or swearing.

“These are textbook red flags of forced labor,” said Aaron Halegua, a lawyer and labor expert at New York University Law School. “Withholding passports or requiring performance bonds is not permitted under Chinese labor laws.”

Jinjiang, which also builds BYD factories in China, denied the allegations. “The claim that Jinjiang’s employees were ‘enslaved’ and ‘rescued’ is totally off base,” the company said.

BYD Faces Scrutiny

BYD, the world’s leading electric vehicle maker, distanced itself from the controversy. “We had no knowledge of these violations until late November,” said Alexandre Baldy, BYD Brasil’s senior vice president.

However, Brazilian labor authorities insist BYD is responsible. “BYD is directly accountable for what happens at its site,” said Matheus Viana, Brazil’s acting chief of labor inspections. Following the raid, BYD ended its contract with Jinjiang and promised reforms.

A Promise of Jobs, Now Under Question

The factory in Camaçari, Bahia, was supposed to be a beacon of economic revival. BYD took over a former Ford plant, pledging 20,000 jobs, twice the number lost when Ford left Brazil in 2021.

Local unions, however, feel betrayed. “BYD didn’t play fair,” said Antonio Ubirajara Santos Souza, a union leader. Brazilian workers on the same site have complained of inadequate drinking water and poor working conditions.

Political concerns are also growing. Bahia state is set to host other Chinese-funded projects, including a $1.28 billion bridge in Salvador. “We can’t develop our state at the cost of slave labor,” said state congressman Alan Sanches.

Governor Jeronimo Rodrigues, while committed to the BYD investment, stressed the need for ethical labor practices. “BYD must provide decent working conditions,” he said.

Union leader Julio Bonfim warned that if local workers lose job opportunities to imported labor, “BYD will face its first strike before production even begins.”

Read more on Workers rescued from abusive conditions in BYD’s $620m Brazil project