Brazil halts BYD factory construction as over 160 workers are rescued from “slavery-like” conditions

Brazilian authorities have suspended the construction of a factory for Chinese electric vehicle giant BYD in Bahia, amid a growing BYD factory scandal. Over 160 workers were rescued from harsh and exploitative conditions in Camaçari, where they endured severe mistreatment and lived in squalor.

According to the Public Labour Prosecutor’s Office (MPT), workers endured horrifying conditions under the supervision of Jinjiang Construction Brazil, a subcontractor for the project. Passports and wages were withheld, leaving workers trapped in a state of forced labour. Living arrangements were equally grim, with some sleeping on beds without mattresses and 31 people forced to share a single bathroom.

“The conditions found in the lodgings revealed an alarming picture of precariousness and degradation,” the MPT stated. Under Brazilian law, “slavery-like conditions” include debt bondage and any work that violates human dignity. In this case, the withheld wages and the excessive costs to terminate employment contracts constituted clear violations.

The workers were constructing BYD’s first electric vehicle factory outside of Asia, a project expected to boost Brazil’s EV market and scheduled to begin operations in March 2025. However, the scandal has overshadowed BYD’s ambitious plans in the region.

BYD, which stands for “Build Your Dreams,” is a global leader in electric vehicle production, recently surpassing Tesla in quarterly sales. The company’s expansion into Brazil, its largest overseas market, had been seen as a significant milestone. But now, BYD faces scrutiny over its reliance on contractors who have been accused of exploiting vulnerable workers.

In a statement, BYD condemned the working conditions, announcing it had severed ties with Jinjiang Construction Brazil. The firm claimed to have conducted multiple reviews of working conditions and pressed the subcontractor to improve, to no avail. “We remain committed to full compliance with Brazilian legislation,” BYD asserted. Affected workers have since been relocated to hotels, the company added.

The $484 million investment in the Bahia factory is part of BYD’s broader strategy to dominate global EV markets, capitalising on its successes in China. The company has been aggressively expanding its footprint in Brazil, having opened its first factory in São Paulo in 2015 to produce chassis for electric buses.

However, the scandal has cast a shadow over BYD’s reputation and raised questions about labour practices in the global EV supply chain. While BYD has distanced itself from the allegations, critics argue that companies bear the ultimate responsibility for ensuring ethical practices among their contractors.

This development also highlights the growing backlash against Chinese dominance in the EV sector. While China’s government subsidies have fuelled the rise of firms like BYD, other nations have responded with protective measures. Both the US and EU have imposed tariffs on Chinese-made EVs, accusing Beijing of unfairly propping up domestic manufacturers.

As BYD’s Brazilian expansion faces serious scrutiny, authorities are now investigating the broader implications of this scandal. The halted factory represents more than just a setback for BYD; it is a stark reminder of the human cost behind ambitious industrial projects.

For the rescued workers, the intervention came too late to prevent suffering but just in time to halt further exploitation. Amidst the ongoing BYD factory scandal, questions persist about how such harsh conditions were allowed to continue under the watch of one of the world’s leading EV manufacturers.