Brazil Adds BYD to Registry of Employers Linked to Slavery-Like Conditions for Workers

Brazil's Ministry of Labor and Employment has added BYD, a Chinese electric vehicle manufacturer, to the country's "dirty list" of employers linked to slavery-like working conditions. The registry, formally known as the Cadastro Nacional de Empregadores, includes companies where labor inspections have documented violations such as forced labor, debt bondage, or conditions analogous to slavery.

This addition stems from an investigation into BYD's operations in the state of Bahia.

The probe focused on 163 Chinese workers recruited by BYD for construction work on a planned factory site. According to @Reuters, these workers arrived in Brazil under contracts that allegedly involved human trafficking elements, including recruitment fees deducted from wages and restrictions on movement.

Brazilian authorities conducted inspections in December 2023, leading to the workers' rescue and repatriation.

inspectors found that the workers faced abusive contract terms, such as excessive working hours exceeding 12 hours per day without adequate rest, and confinement in employer-provided housing with limited access to food and medical care.

The contracts were arranged through a Brazilian construction firm, Jinjiang Group, which subcontracted the labor from China. No criminal charges have been filed yet, but the case has prompted further review by federal prosecutors. BYD stated in a response that it was not directly involved in the recruitment process and that it terminated the contract with the subcontractor upon learning of the issues.

The company emphasized its commitment to ethical labor practices and compliance with Brazilian laws. The ministry's decision to include BYD on the registry applies to its legal entities in Brazil and remains in effect for two years unless appealed successfully.

maintains this registry to monitor and penalize companies involved in severe labor violations, affecting over 200 employers as of 2023.

Inclusion on the list restricts access to government contracts, credit from public banks, and participation in certain business incentives, impacting operations in a key emerging market for electric vehicles. Affected parties include the workers, who have returned to China, and local stakeholders in Bahia, where BYD aims to build a $620 million factory to produce buses and cars.

Next steps include potential appeals by BYD and ongoing investigations into similar practices in Brazil's construction sector, which often relies on migrant labor.

The case highlights challenges in supply chain oversight for international firms expanding in South America. No timeline has been set for resolution.