Brazil has ceased issuing temporary work visas to employees of the Chinese electric vehicle (EV) producer BYD following accusations that 163 Chinese workers at a BYD factory construction site in Bahia were victims of human trafficking and subjected to "slavery-like" conditions. The decision, announced by Brazil's Ministry of Foreign Affairs, has sparked controversy and cast a shadow over BYD's ambitious expansion plans in the South American nation.
The Bahia factory, a $620 million project symbolizing growing economic ties between Brazil and China, has become the focus of a labor rights investigation. Authorities discovered that the workers, brought in by contractor Jinjiang Group, lived in substandard conditions, with dormitories lacking mattresses and rudimentary cooking facilities. Prosecutors alleged the workers were victims of human trafficking, although Jinjiang Group denied these claims, attributing the situation to "translation misunderstandings."
The Ministry of Justice confirmed that it had requested the suspension of BYD's visa issuance on December 20, just days before the allegations were publicly disclosed. A source familiar with the matter revealed that the order was forwarded to Brazil's embassy in Beijing. Additionally, the Justice Ministry stated it might revoke residence permits granted to the affected workers if the alleged irregularities are substantiated.
Brazilian authorities have uncovered 163 workers employed in ‘slavery-like conditions’ at a construction site for an electric vehicle factory — to be operational by Mar 2025 — owned by BYD in Bahia state. The workers were hired in China and brought to Brazil irregularly by… pic.twitter.com/DbXro8KtaJ — Byron Wan (@Byron_Wan) December 24, 2024
BYD, which ranks among the world's largest EV producers, had planned to begin production at the Bahia facility next year with an initial output of 150,000 cars annually. Nearly one in five vehicles BYD sold internationally in the first 11 months of 2024 was in Brazil, highlighting the market's strategic importance for the automaker. Despite the controversy, BYD announced it would terminate its contract with Jinjiang Group and was "studying other appropriate measures." In a public statement, BYD dismissed the allegations as a "smearing campaign aimed at China and Chinese brands."
The labor scandal intensified scrutiny of working conditions at the construction site. A video released by the Bahia State Labor Prosecutor's Office depicted squalid living quarters and basic facilities used by the workers. Prosecutors urged BYD to house the workers in local hotels until a resolution regarding their employment status could be reached. Both BYD and Jinjiang Group agreed to the arrangement, but the fate of the workers remains unclear. Many were reportedly moved from the area, and their current whereabouts are unknown.
Local residents in Camacari, a city near the factory site, expressed confusion about the situation. Many of the Chinese workers have already left the town, and it's unclear who is handling their relocation, one resident said. The labor prosecutor's office, citing the ongoing investigation, declined to comment further.
The allegations have fueled debates over labor rights and corporate accountability in Brazil, where international firms are expanding operations. Critics argue that the case reflects systemic issues in global supply chains. BYD's swift denunciation of the accusations and its efforts to dissociate from the scandal underscore the stakes for the company's reputation amid its global growth ambitions.
