Brazil plans to fine every worker found working in “slave-like” conditions at a forthcoming factory in the country by Chinese electric car giant BYD.
The automaker will also face continued scrutiny of the factory site, where 163 Chinese workers were rescued last month.
The plant, BYD's first outside Asia, has become a symbol of China's growing influence in Brazil and an example of closer ties between the two countries.
AF also reports: Can Musk’s relationship with Trump overcome the U.S. military ban on CATL?
Authorities who raided the site said Workers there work and live in inhumane conditionsincluding cramped and unsanitary accommodation, long working hours and conditions that amount to “forced labour”.
Jinjiang, the BYD contractor responsible for recruitment, also withheld the passports of 107 workers, investigators said.
Brazilian authorities, who are investigating BYD's labor practices in the country, now say the automaker brought in hundreds of Chinese workers on irregular visas to build factories.
About 500 Chinese workers were brought to work in Brazilian factories, said Liane Durao, leader of the investigation announced by Bahia state labor authorities in late December.
Durao said 163 workers rescued by labor authorities in December were leaving or had left Brazil.
“All of this is abnormal,” she said, adding that BYD would fine each worker in such a situation but did not elaborate on the total amount to be paid. Durao is a labor inspector whose team oversees workplace safety for the Brazilian Ministry of Labor.
Durao said labor inspectors will also continue to monitor BYD's construction sites to ensure workers who remain at the factories are not subjected to abusive working conditions.
As of Wednesday's close, Shenzhen-listed BYD's shares fell 1.77%, while the Shanghai Composite Index rose 0.02%.
Factories key to BYD's global expansion
In Brazil, slavery is legally defined as forced labor as well as debt, degrading working conditions and long working hours that pose health risks.
Investigations into slavery could have serious consequences for the country's employers.
Brazil publishes list of “slave laborers” – also known as “Dirty List” — Every six months. Companies added to the list will remain on the list for two years if no new violations are discovered during this period.
Businesses on the list cannot bid for federal contracts or receive state loans. The list is also used by private banks to measure credit risk and by international buyers focusing on their supply chains.
That would make the ongoing investigation a major headache for Beijing and BYD, given that Brazil is the automaker's largest market outside China.
In the first 11 months of 2024, nearly one-fifth of BYD's cars sold outside China were sold in Brazil. The country is also China's largest export market for new energy vehicles.
As part of plans to start production in Brazil, BYD has been building a Bahia plant that will initially produce 150,000 vehicles. The Bahia factory complex alone has an investment of $620 million.
China in damage control mode
Following an ongoing review, BYD has now agreed to adjust conditions for hundreds of workers remaining in Brazil to comply with Brazilian labor laws.
A person close to BYD told Reuters the Chinese company believed their visas were issued appropriately and that all employees came to Brazil voluntarily.
Labor authorities and representatives of BYD and its contractors working in Bahia also met on Tuesday to discuss how to protect the rights of all workers at the plant.
It's unclear whether an investigation into working conditions at the plant will delay construction. The Brazilian government has now Suspension of temporary visa issuance to BYD.
Reports of irregularities in Bahia could become a major sticking point in bilateral relations between China and Brazil.
Brazil has long sought more Chinese investment. But Beijing’s model of bringing Chinese workers to countries where it invests poses a challenge to local job creation, a top priority of President Luiz Inacio Lula da Silva.
Meanwhile, Chinese authorities appeared to go into damage control mode on Wednesday.
In response to reports that BYD brought Chinese workers to Brazil on irregular visas, Ministry of Foreign Affairs spokesperson Guo Jiakun said “The Chinese government attaches great importance to protecting the legitimate rights and interests of workers.”
He added that it “has always required Chinese companies to operate in compliance with the law”.
China is willing to continue to strengthen exchanges and cooperation with Pakistan.
- Reuters, with additional editing and input by Vishakha Saxena
Also read:
China’s BYD electric car sales beat Tesla again in the fourth quarter of last year – South China Morning Post
China's BYD sales increase, sales may exceed Ford, Honda
As exports explode, Brazil is now China's top destination for electric vehicles
China's BYD plans to enter Canadian electric vehicle market
China's BYD in talks to export Mexican factory
BYD Thailand dealers will open three more electric vehicle sales points amid sales boom
Minister: Welcome China's BYD to open electric vehicle factory in France
China's BYD opens first electric vehicle factory in Southeast Asia
BYD sales surge in Southeast Asia, while Tesla growth slows
China's largest electric car maker BYD aims for massive expansion in Vietnam
