Brazilian prosecutors have filed a public civil action against major Chinese electric vehicle manufacturer BYD. They claim rampant human trafficking, slave-like conditions, and a construction camp for BYD’s factory in Brazil. The lawsuit targets two contractors associated with BYD and highlights alarming working conditions reported by employees at the site.
The allegations emerged after a series of investigations exposed horrifying practices at the construction site where laborers lived in squalid conditions. According to reports, employees slept on beds with no mattresses and a single toilet was shared by 31 employees. Moreover, workers had their passports confiscated, curtailing their freedom and mobility.
Brazilian prosecutors developed even additional reason for alarm over the employment practices at the Gurupi site. In the process, they exposed contracts that contained retaliatory clauses, mandated grueling work schedules and lack of provided rest days each week. In one instance, employers deducted more than 70% of their employees’ paychecks. On top of this, costs for contract termination increased dramatically.
The Brazilian Public Ministry of Labor (MPT) is seeking a total of 257 million Brazilian reais in compensation. This figure is about $45.5 million or £33.7 million, and it is aimed directly at BYD and its subcontractors. BYD is suing competitors to consolidate its position in Brazil. The firm, which regards Brazil as its biggest potential offshore market, is committed to cutting a serious swath there.
BYD’s factory in Brazil was slated to become the company’s first electric vehicle plant outside of Asia, with operational plans set for March 2025. In 2015, the company capped its expansion with its first foray into Brazil. They even opened a factory in São Paulo with the specific purpose of producing chassis for electric buses. The development of the new plant had major missteps from the start. Work was stopped by authorities late last year due to the alleged dangerous conditions, leading to disastrous results.
In response to these allegations, BYD has asserted its commitment to ethical practices, stating that it maintains a “zero tolerance for violations of human rights and labour laws.”
“Zero tolerance for violations of human rights and labour laws.” – BYD
Even as this legal fight continues, it is raising important questions about work standards. As such, it further underscores the role of corporate responsibility within Brazil’s booming electric vehicle market. The result could have far-reaching consequences not just for BYD but for other companies doing business in the area.