Brazil has added Chinese automaker BYD to a government registry of employers accused of subjecting workers to conditions similar to modern slavery, following a 2024 labor scandal involving 163 Chinese workers. The listing, issued by Brazil’s Labor Ministry, increases pressure on the company in one of its largest overseas markets and restricts its access to certain types of loans from Brazilian banks.
The case centers on allegations that workers were recruited under abusive conditions by contractor Jinjiang Group to help build BYD’s only auto plant in the country. According to findings, workers were required to surrender their passports, pay deposits of nearly $900 refundable only after six months, and accept arrangements where most of their wages were transferred back to China. Brazilian authorities maintain that BYD is ultimately responsible for ensuring proper labor conditions, including oversight of contractors.
Labor inspectors uncovered severe living conditions during a raid, describing overcrowded housing where up to 31 workers shared a single residence with only one bathroom. Reports also indicated that some workers slept without mattresses, while food and personal belongings were stored in unsanitary environments. Officials labeled the conditions as degrading, sparking international criticism.
The scandal led to delays in the construction of the plant, although operations have since resumed. Luiz Inácio Lula da Silva attended the factory’s inauguration in October, signaling strong economic ties between Brazil and China. The facility has since produced more than 25,000 vehicles.
Although the blacklisting does not affect the plant’s operations, it poses reputational risks and financial consequences for BYD. Companies placed on the registry remain there for two years unless removed by court decision and are restricted from accessing certain public financing options. While firms can avoid inclusion by agreeing to reform labor practices and compensate affected workers, BYD reportedly reached an agreement with labor prosecutors but not with labor inspectors.
The development highlights increasing global scrutiny of labor practices within international supply chains, particularly as major manufacturers expand into emerging markets. For BYD, the decision marks a significant challenge as it continues its push to grow in the global electric vehicle industry.
