Chinese automaker BYD is under growing pressure after Brazil officially placed the company on its “dirty list” for employers linked to slavery-like working conditions.
The decision follows a major investigation into the construction of BYD’s factory in Brazil, where 163 Chinese workers hired through contractor Jinjiang Group were allegedly subjected to abusive contracts and extremely poor living conditions.
According to investigators, some workers were forced to surrender their passports, while large portions of their salaries were transferred directly back to China. They were also reportedly required to pay deposits worth around 900 dollars, which could only be recovered after several months of work.
The living conditions were equally alarming. Brazilian labor inspectors discovered overcrowded housing with no proper beds or basic facilities. Food was reportedly stored on the floor next to personal belongings, and in one case, 31 workers were sharing a single bathroom.
Brazilian authorities described the conditions as degrading and inhumane, eventually adding BYD to the country’s official blacklist for labor violations.
The decision will not stop BYD from operating its factory in Brazil, but it could seriously damage the company’s reputation in what remains its largest market outside China. It may also make it more difficult for BYD to access certain Brazilian bank loans in the future.
BYD has not commented on the latest developments, although the company previously claimed it was unaware of any labor violations until Brazilian media reports emerged in late 2024.
Jinjiang Group, the contractor responsible for recruiting the workers, has denied all allegations. However, Brazilian authorities believe BYD still carries ultimate responsibility because it owned the project and should have monitored the contractor’s actions more closely.
The controversy sparked outrage both inside Brazil and internationally, even reaching China itself. It also caused significant delays to the construction of the factory.
Despite the scandal, BYD later managed to regain some momentum. Brazilian President Luiz Inácio Lula da Silva attended the factory’s opening ceremony last year, highlighting the growing economic relationship between Brazil and China.
Since opening, the factory has already produced more than 25,000 vehicles, underlining just how important the Brazilian market is for BYD’s long-term ambitions.
Brazilian law allows companies to avoid being added to the blacklist if they reach agreements with the government, commit to improving working conditions, and compensate affected workers.
BYD did sign an agreement with labor prosecutors, but it failed to reach a similar deal with labor inspectors. As a result, the company was officially placed on the list and could remain there for up to two years unless a court decides otherwise.
