Brazil shuts BYD factory site over ‘slavery’ conditions

Brazilian authorities have halted construction of a Chinese EV (EV) factory, saying workers are living in “slavery” conditions.

More than 160 workers have been rescued in northeastern Brazil’s state of Bahia, according to reports a statement from the Public Labor Prosecutor’s Office (MPT).

They say they were put in “humiliating” conditions and their passports and salaries were hidden by the construction company.

BYD said in a statement that it had severed ties with the company involved and remained committed to “full compliance with Brazilian law”.

The factory is scheduled to be operational by March 2025, and is set to be BYD’s first EV plant outside of Asia.

The workers, who were hired by Jinjiang Construction Brazil, live in four locations in the city of Camaçari.

At some such facilities, workers are placed on beds without mattresses, according to prosecutors.

Each bathroom was also shared with 31 workers, which forced them to get up early in the morning to get ready for work.

“What was found in the shelters showed an alarming picture of danger and destruction,” MPT said.

“Similar to slavery”, as defined by Brazilian law, includes debt slavery and work that violates human dignity.

The MPT added that this included “forced labour”, as many workers were deprived of their wages and faced significant costs in the termination of their contracts.

BYD said the affected workers were evacuated to hotels.

It added that it had carried out a “detailed review” of the working conditions and living conditions of its contracted workers, and had asked “several times” for the construction company to make changes.

BYD, short for Build Your Dreams, is one of the world’s largest EV manufacturers.

They sold more electric cars than Elon Musk’s Tesla in the last three months of 2023, when the two fought for the top spot in the division.

The company has also been expanding in Brazil, which is its largest foreign market by border.

It first opened a factory in São Paulo in 2015, producing electric bus chassis.

Last year, it announced it would invest 3 billion reais ($484.2m) in Brazil to build an EV manufacturing plant.

EV sales in China have been boosted by government subsidies. which encourages consumers to trade in their gasoline vehicles for EVs or hybrids.

But there is a growing backlash in other countries against what some see as the Chinese government’s unfair subsidies to domestic automakers.

Major markets such as the US and the EU have imposed tariffs on EVs from China, with more tariffs expected during the upcoming term of US President-elect Donald Trump.